Markets pare gains on weak European cues, Nifty holds 6,500

Markets pared most of the day's gains on profit taking in IT majors and private bank share

Markets pared most of the day's gains in late noon trades on Tuesday, amid weak European cues, after profit taking was seen in IT majors and private bank shares.

At 2:30PM, the 30-share Sensex was up 7 points at 21,817 and the 50-share Nifty was up 4 point at 6,509.

Meanwhile, global investment bank Goldman Sachs upgraded Indian shares to "overweight" from "marketweight" and raised its target on Nifty to 7,600, citing reduced external vulnerabilities, including a narrowing current account deficit, and potential for gains ahead of elections that conclude in May.

The Indian rupee was trading higher at Rs 61.09 against Friday's close of Rs 61.19 on demand for the dollar from oil refiners. Domestic shares also gave up gains on profit-taking after hitting new life highs earlier in the session. Traders will continue to monitor shares and debt for cues on foreign fund flows during the session.

Asian shares firmed up as concerns over the situation in Crimea seems to have eased for now. Japan's Nikkei ended up 0.9%, Shanghai Composite was up 0.1%, Hang Seng gained 0.5% and Straits Times was marginally down by 0.1%.

European shares opened lower as traders turned cautious in view of the ongoing situation in Ukraine. All the major stock indices in the region such as CAC, DAX and FTSE all down 0.3-0.4% each.

The BSE Power, FMCG, Oil and Gas indices were among the top gainers while IT, Realty, Capital Goods were the top losers. Bankex also pared most of the early gains.

Index heavyweights contributed the most to the gains on the Sensex. ITC was up nearly 2% and Reliance Industries was up 1.3% at Rs 897.

Maruti Suzuki was up nearly 8% after the company decided to seek the approval of minority shareholders for the company’s Gujarat project.

SBI was up over 2% after the state-owned bank recently said its plans to sell non-performing assets worth Rs 5,000 crore to asset reconstruction companies.

HDFC Bank and ICICI Bank which had gained in early deals were now trading 0.4-1% lower. HDFC was down 1.6%.

L&T also witnessed profit taking and was down 1.5%. In the auto segment Tata Motors and M&M were down 1.8-3.2% each.

Shares of IT majors Infosys and TCS were down 0.8-1% each on the back of an appreciating rupee as they earn most of their revenues from exports to the US.

In the broader marketr, BSE Mid-cap and Small-cap indices were up 0.7% each.

Market breadth was positive with 1,380 gainers and 1,286 losers on the BSE.