Markets continue to trade in the negative zone with weakness in banking and IT stocks. The Sensex after opening firm, touched a high of 19,811. However, profit booking by investors saw the index dropping 260 points from there to a low of 19,551. The BSE benchmak recovered in noon trades and was trading at 19,645 - down 41 points.
Nifty was down 11 points at 5,899. Broader markets in the Bombay Stock Exchange, however, outperformed. BSE mid-cap and small-cap indices gained 0.6% each to 7,200 and 8,793.
"We expect profit-booking in the coming days. However, we expect market to take support at 5865 and 5800," said Shshank Mehta, Derivatives Strategist, Nirmal Bang.
Foreign Insitutional Investors continued to buy shares in India. FIIs has invested Rs 5,595.7 crore since March 22 to Tuesday.
Global markets were also in green. Hang Seng jumped 135 points to 24,285. Shanghai Comsposite jumped 1.2% to 3,001, shrugging off the hike in key rates by the People's Bank of China.
Oil prices hovered near 2-1/2-year highs raising inflation and interest rates worries. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position.
Vedanta Group of companies were on the buzzer after Sebi approved its open offer to buy stake in Cairn India. The company now awaits the Indian Government's approval. Sterlite jumped to a high of Rs 182 in morning trades but pared gains soon after. The stocks was flat at Rs 178. Cairn India shed 3.5% at Rs 352.
Auto stocks gained on news that companies may raise prices to offset a surge in raw material costs. Hero HOnda gained 1.3% at Rs 1,666. Tata Motors jumped 1% to Rs 1,292. Bajaj Auto was up 0.5% at Rs 1,450.
NTPC jumped 1.3% to Rs 190 as profit rose 24% to Rs 2505.42 crore and net sales increased 17% to Rs 14488 crore in Q4 March 2011.
IT index was weak afte the Rupee touched a 5-month high against the dollar, on fears that it will adversely affect the operating margins in Indian IT firms. Wipro shed 2.3% at Rs 469. TCS was down 1% at Rs 1,227. Infosys traded flat at Rs 3,284.
"hough automobile sector may continue to be a market performer, the information technology (IT) sector stands out as investors will buy stocks that have lesser issues of corporate governance," said Gajendra Nagpal, Founder & CEO, Unicon Investment Solutions.