Markets end flat

The Sensex ended (provisional) at 18,728 - down 16 points. Nifty ended at 5,622 - down 10 points.
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(Updated at 1435 hrs)

Weakness in banking stocks dragged the markets to the day's low in late-noon trades, but the bourses have recovered from the lows. Earlier in the day, the Sensex had touched a high of 18,823 on sustained buying from FIIs. However, the index changed direction and slipped 140 points from the day's high to touch a low of 18,682. The BSE benchmark has rebounded once again and is now up 33 points at 18,777. The Nifty was up six points at 5,638.

Broader markets, however, managed to stay in the green, albeit with nominal gains. The BSE small-cap index added 0.2% at 8,355. Mid-cap index was unchanged at 6,961.

Foreign Institutional Investors (FIIs) have been investing heavily in Indian markets. According to provisional data, FIIs have bought shares worth Rs 2,557 crore from July 1, 2011.

Fresh euro-zone debt concerns unfolded late on Tuesday, when Moody's downgraded Portugal's long-term government bond ratings to speculative. Asian markets were mostly in red. Hang Seng shed 1% at 22,518. However, Nikkei advanced 1% to 10,082. Seoul Composite and Taiwan Weighted moved up while Shanghai Composite ended in the red.

Meanwhile, in India, the important review meet to resolve inter-ministerial differences relating to environment clearances for the coal and power projects has been postponed to next week. The meeting has been put off for the fourth time since May.

Selling pressure was witnessed in banking stocks with the BSE bankex declining 1% at 12,917. Most of the private banks slipped in trades, led by Kotak Mahindra Bank and Axis Bank. Heavyweight, ICICI Bank slipped 1.6% to Rs 1,079. Canara Bank and SBI dropped 1-2% each.

Meanwhile, consumer durables and capital goods indices were up around 1-2% each. VIP Industries and Titan Industries were the two big gainers among cosumer durables stocks while Suzlon, Punj Lloyd and Larsen & Toubro gained among the capital goods stocks.

Reliance gained 0.8% at Rs 854 after yesterday's around 3% fall, on reports that the company agreed to drill three development wells at D6 block in the Krishna Godavari (KG) basin.

Aviation stocks declined as crude oil prices went up in morning trades. Jet Airways, Kingfisher Airlines and SpiceJet declined 1-2% each. Muthoot Capital dropped 2% in trades following the board's approval of a rights issue.

In other news, Sebi is may allow interoperability between the two main stock exchanges to facilitate aggregated clearing in the next two-three years. Sebi currently allows traders to settle and clear only on the exchange on which the transaction takes place. This move would bring down the cost of trading considerably.