Markets pare gains in noon trades

The markets have surrendered most of their gains in noon trades. The Sensex is quoting at 17,550, higher by 43 points and the Nifty is at 5,275, up 20 points.

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(Updated at 1434hrs)

The benchmark indices are firm this afternoon in contrast to the insanity prevalent in the previous session. The Sensex is quoting at 17664, higher by 153 points and the Nifty is at 5305, up 45 points. The midcap index is at 6622, higher by 24 points and the smallcap index is at 7933, up 25 points. IT and oil stocks are leading the day's gains.

The benchmark indices had gone into a tizzy in the previous session on fears that the government may re-visit the Indo-Mauritius double taxation avoidance treaty in an attempt to tax capital gains on investments routed through Mauritius. And the woes were only compounded by the weak cues from the global market front in wake of the inability of European governments to agree on a loan payment scheme to spare Greece from default.

The return of stability across the Asian and European bourses seem to have soothed ruffled feathers back home, atleast for now. The oversold conditions, what with the markets hitting four-month closing lows on Monday, also seem to be facilitating the pullback in the current session. In fact, the BSE benchmark had soared more than 200 points in mid-morning trades before paring some of its gains on Finance Minister Pranab Mukherjee's statement that India had indeed resumed talks with Mauritius on a double taxation avoidance agreement.

There is green across Asia, with the exception of Shanghai; Hang Seng, Nikkei, Straits Times and Seoul indices have gained in the region of about a percent each. Ditto with the European indices, with the CAC, FTSE and DAX gaining in the same proportion in early trades.

TCS has soared by 2.8% at Rs 1099 to top the gainers list on the BSE and Infosys has jumped by 1% at Rs 2738. Index heavyweight RIL has reversed its 7-day losing streak, adding 1.7% at Rs 643 and HDFC has gained 2% at Rs 643.

On the other hand, Jaiprakash Associates has weakened by 2.7% at Rs 76, DLF has shed 1.1% at Rs 216 and Cipla has lost 0.7% at Rs 314.

The market breadth is positive. Out of 2776 stocks traded on the BSE, there are 1385 advancing stocks as against 1258 declines.