Markets pare gains after hitting record highs in a choppy trade

The benchmark Nifty50 index hit its fresh high in the late morning deals after the GST Council on Saturday cleared the pending rules for transitioning to the new tax regime and fixed the tax rates on biscuits, gold, footwear, and textiles. The gains were, however, capped as investors remained cautious ahead of the Resrve Bank of India (RBI)'s policy meeting, which begins tomorrow. 

Economists don’t expect the six-member Monetary Policy Committee (MPC) to tinker with policy rates of the RBI when it meets on Tuesday. Twelve economists polled by Business Standard ruled out a rate cut by the central bank even as growth numbers slowed down and inflation surprised most on the downside. The MPC's meeting will conclude on Wednesday. CLICK HERE FOR THE FULL REPORT

At 1:10 pm, the S&P BSE Sensex was trading at 31,276, up 3 points, while the broader Nifty50 was ruling at 9,665, up 12 points.

In intraday trade, the 30-share Sensex rose as much as 48 points to 31321, while the 50-share Nifty rallied 23 points to hit its fresh high of 9,677.

The S&P BSE Midcap and the S&P BSE Smallcap indices outperformed the frontline indices by rising 0.2% and 0.6%, respectively.

The breadth, indicating the overall health of the market, was strong. On the BSE, 1,323 shares rose and 759 shares declined. A total of 100 shares were unchanged.

V K Sharma, Head (PCG) at HDFC Securities believes the Nifty is likely to head higher in the ongoing week thanks to three reasons: i) GST rates on gold, apparels, textiles and biscuits, ii) RBI's policy meet where it is likely to sound more accommodative, and iii) the markets are confident that an expected rate hike in the US on June 14 will be easily absorbed.

Babaj Auto (up 2.4%), ONGC (up 1.5%) and Adani Ports (up 1.4%) were the top gainers on the Sensex, while ITC, Lupin and Coal India shed up to 1%.  

Reliance Communications (RCom) rose 1.21% after the company said its creditors have allowed the company to postpone debt servicing payments till December 2017. 

Jewellery companies rallied by up to 15% on the BSE after the Goods and Services Tax (GST) Council fixed GST rate on gold, gems and jewellery at 3%.

Titan Company, PC Jeweller, Gitanjali Gems, Tribhovandas Bhimji Zaveri (TBZ), Tara Jewels, Thangamayil Jewellery and Renaissance Jewellery were up in the range of 2-15%. Titan Company, the largest gainer among the pack, rallied to its record high of Rs 543, up 15% on the National Stock Exchange (NSE).

North Eastern Carrying Corporation (NECC) hit its upper circuit of Rs 50.35, up 10% on the BSE after the logistics firm embarked on an expansion drive with plans to double its reach to 500 locations across India in the next three to four years to tap opportunities after GST implementation.

Asian markets were trading mixed after the latest terror attacks in London that left the pound slightly weaker. The Japan's Nikkei erased early losses to trade 0.1% higher, while South Korea's Kospi index rose 0.2%.

The ASX 200 was down 0.74%, while China's Shanghai Composite shed 0.5% despite the positive read from the May Caixin services PMI. The Hang Seng Index was also down 0.18%, however, the Shenzhen Composite added 0.6%.