After trading subdued till the mid-session, the Indian market gained some strength in the afternoon session on Thursday, thanks to recovery in world markets.
Chinese stocks led a recovery in Asia after Ma Delun, a deputy governor of China's central bank, said the nation will maintain a moderately loose monetary policy.
The European markets bounced back on earnings optimism, helped by forecast-beating earnings from drugmaker AstraZeneca and tech firm Capgemini.
Data showing improvement in European confidence in the economic outlook and a slide in Germany's unemployment rate to 7.6 percent in July also boosted investor sentiment.
The Dow futures pointed to a firmer start on Wall Street Thursday morning, as investors turn their attention to data on initial jobless claims due later in the day and second-quarter GDP figures scheduled to be released on Friday.
Back home, rollover of positions on account of the expiry of near-month derivative contracts and a drop in core-sector growth in June limited the upside for Indian equities.
Amid sluggish Asian cues, the 30-share BSE Sensex opened flat at 17,962 and fell later to a low of 17,903 before finally ending up 35 points or 0.19% at 17,992, with 17 of its components ending firmly in positive territory. HDFC, Hindalco Industries, ICICI Bank, Tata Motors, Hindustan Unilever, Sterlite Industries and ITC were the top gainers.
On the flip side, Reliance Industries, ONGC, Reliance Infrastructure, Jindal Steel, Bharti Airtel and Reliance Communication lost between 1% and 2%.
The 50-share Nifty rose by 11 points or 0.21% to 5,409 and the BSE mid-cap and small-cap indexes closed up about 0.2% each. However, in the broader market, declining shares outpaced gaining ones by 1475 to 1410 on the BSE.
Sector-wise, public sector stocks saw fresh demand followed by select banking, FMCG, auto and realty stocks, while oil/gas, telecom, consumer durable and capital goods stocks ended subdued.
Mortgage lender HDFC rose 2.75% after it fixed August 20 as the record date for a 5-for-1 stock split. Likewise, state-run MMTC climbed almost 22% on stock-split news. Engineers India, which received good response from institutional investors for its follow-on public offering, closed up 2.26%.
Carmaker Maruti Suzuki eased 0.41% amid reports that it is fixing an oil leakage in the engines of 6000 Altos produced in April. Heavyweight Reliance Industries gave off a percent, extending a 3% loss in the previous session
HCL Technologies rose 1.53% on forecast-beating results. Hexaware Technologies tumbled 3% after its June-quarter consolidated net profit plunged 63% year-over-year, weighed by cross-currency fluctuations and an average 15% salary hike to offshore employees.
Andhra Bank gained 2% on posting a 25% rise in quarterly net profit. Oriental Bank of Commerce jumped 6% after its first-quarter net profit rose 41% year-over-year. Bank of Baroda added 2.53% after its June-quarter net profit rose 25% from a year earlier. Tata Teleservices rallied 7% on strong results.
Tata Communications slumped 5% after its June-quarter loss widened to Rs 281.39 crore from Rs 55.13 crore last year. EID Parry and Renaissance Jewelery plummeted around 4% each on disappointing results.
Jindal Steel, which expects to produce 2 million tonne steel in FY11, ended down 1.22%. Aban Offshore fell 2.29% despite winning a Rs.50-crore order for the deployment of a jack-up rig. Ultratech Cement rose 1.94%, shrugging off weak Q1 results.
In economic news, India's annual food inflation for the week ended July 17 eased to 9.67% from 12.47% a week before, as prices of cereals, rice and vegetables declined, data released by the commerce & industry ministry showed on Thursday.
However, the fuel inflation remained elevated at 14.29% in mid-July as against 14.27% in the previous week. Inflation in the primary articles group stood at 14.5% compared to 16.48% in the week ended July 10.
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