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Markets pared early gains and slipped into negative terrain amid profit taking in FMCG majors and select auto majors.
At 9:55AM, the 30-share Sensex was down 62 points at 27,147 and the 50-share Nifty was down 14 points at 8,160.
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(Updated at 9:35AM
Benchmark indices opened marginally higher led by IT major Infosys and banking majors SBI, HDFC Bank and ICICI Bank among others.
At 9:35AM, the 30-share Sensex was up 65 points at 27,274 and the 50-share Nifty was up 26 points at 8,200.
On the domestic front, government pushing forward the insurance and coal sector reforms through an executive order is likely to boost investor sentiments.
"The short-term trend has again turned to negative till the Nifty doesn’t cross and hold immediate hurdle of 8,250. On the downside, holding below 8,250 may drag index to 8,080 and lower levels," said a morning note from Anand Rathi.
Meanwhile, selling by foreign institutional investors was heavy on Wednesday and they were net sellers in Indian equities worth Rs 2,808.27 crore, as per provisional stock exchange data.
Among Asian markets, Nikkei is trading lower by around 0.2% subdued by profit-booking which emerged on Thursday after five straight sessions of gains. The Chinese Shanghai Composite index has extended gains from Thursday when the index had gained around 3% led by the surge in financials. It is trading higher by around 0.3%.US markets were closed on account of Christmas holidays on Thursday. In a shortened session on Wednesday, the major indices had closed on a flat note with Dow Jones Industrial Average ending at record-closing high.
BSE Capital Goods and Power indices were the top sectoral gainers in early trades up 0.8% followed by Bankex, IT, Consumer Durables among others.
Shares of IT exporters were trading higher after upbeat US economic data as most of their revenues come from exports to the US. Infosys and TCS were up nearly 1% each.
Bank shares witnessed buying interest with ICICI Bank, HDFC Bank, Axis Bank up 0.5-0.9% each.
In the capital goods segment, L&T was up 0.8% and BHEL was marginally up by 0.4%.
Reliance Industries was up 0.5%. Media reports suggest that the company has signed a deal with Mitsui OSK Lines (MOL) for transporting liquefied ethane from North America starting 2017.
Power Grid Corporation was up over 2% on media reports that government is going to invoke 'compressed time schedule' clause to award around eight transmission projects to the company.
Among other shares, SpiceJet was up 9% on reports that US-based private equity firm and its co-founder are planning to infuse $200 million in the cash-strapped airline.
Market breadth was strong with 997 gainers and 442 losers on the BSE.
In the Sensex pack, Infosys was up nearly 1% while SBI, ICICI Bank, HDFC Bank and HDFC were among the top gainers in early trades.
