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Congress-led United Progressive Alliance government will unveil the austere Budget next week which is expected to have the unintended impact of adding to inflationary pressure, dampening chances for rapid interest rate cuts that the government wants, reports showed.
Asian markets also recovered from Thursday's sell-off after weak business conditions in US supported hopes that the Federal Reserve may not discontinue its economic stimulus earlier than expected.
At 2:15PM, the Bombay Stock Exchange's 30-share index Sensex rose 31 points to trade at 19,355 while the National Stock Exchange's 50-share Nifty added 7 points at 5,860.
Meanwhile, Asian markets such as Japan's Nikkei gained 0.7% to 11,386, Hong Kong's Hang Seng fell 0.5% to 22,782, Singapore's Straits Times was down 0.1% to 3,285, while China's Shanghai Composite declined 0.5% to 2,314.
European markets too traded on a flat note. France's CAC gained 0.8% to 3,654, Germany's DAX rose 0.4% to 7,615 while UK's FTSE was up 0.4% to 6,315 in early trades.
Back home, real-estate, IT, healthcare , banking sectors gained while FMCG, autos, metal led drop on BSE.
Among key Sensex stocks, Bharti Airtel gained 4%, Wipro and TCS rose 3% and 0.6% respectively, Bajaj Auto gained 1.5%, ICICI Bank rose 1% on BSE.
Among losers, HUL and ITC declined 2.3% and 2% respectively, Sterlite and Hindalco Industries dropped nearly 0.3% each, SBI fell 0.2% while Maruti Suzuki is down over 1% on BSE.
The other key notable movers include, TVS Motor is down nearly 2% at Rs 41.20 as proxy advisory firm Institutional Investors Advisory Services (IIAS) has opposed the proposed appointment of Sudarshan Venu, 24, to the board of directors of the Chennai-based company.
DLF touched a yearly high of Rs 281.80 in an otherwise flat trading session today since the management announced its intention to reduce its debt by half to Rs 11,000-12,000 crore over the next 2-3 years.
Housing Development Finance Corp, country's biggest mortgage lender, declined nearly 2% after global brokerage firm Goldman Sachs cut its rating to 'sell' from 'neutral' citing concerns India's economy would recover at a "modest" pace and the prospect of rising competition.
The broader markets traded positive with mid-caps and small-caps gaining 0.1-0.2% on BSE.
The market breadth is negative. Out of 2,755 stocks traded, 1,342 stocks slumped compared to 1,264 advances on BSE.
