Markets remain range bound

Key share indices continued to remain volatile in a narrow range, oscillating between negative and positive terrain.

By 11:25, the 30-share Sensex was down 16 points at 18,526 and the 50-share Nifty was down 5 points at 5,605.

On the global front, Asian shares retreated from four-month highs on Tuesday while gold and copper eased, as markets calculated the impact on growth from the Federal Reserve's aggressive stimulus and eyed whether Spain will request a bailout to ease its fiscal strains. Nikkei, Strait Times, Hang Seng, Taiwan, Kospi and Shanghai have declined between 0.1-1%.

Back home, the combined CPI inflation for the month of August 2012 has been recorded at 10.03% compared to 9.86% in July 2012.

The rupee declined by 27 paise to Rs 54.28 against the dollar in early trade today at the Interbank Foreign Exchange market on strengthening of the American currency overseas.

On the sectoral front, BSE PSU, Power, FMCG and TECk indices have surged by almost 1% each. However, BSE Oil & Gas index has declined by 0.5%.

Banking shares mainly public sector undertaking (PSUs) banks have extended their previous day’s rally and are trading higher by up to 6% after the Reserve Bank of India (RBI) reduced the cash reserve ratio (CRR) by 25 basis points to 4.5% on Monday.

Union Bank of India and Oriental Bank of Commerce have rallied more than 5% each on the National Stock Exchange. The market price of both these state-owned banks surged almost 15% in past two trading sessions.

Punjab National Bank, Indian Overseas Bank, Canara Bank, Allahabad Bank and Bank of India are trading higher by 3-4%, while, State Bank of India, Bank of Baroda and IDBI Bank are up 1-2% on the NSE.

From the FMCG space, ITC has surged by nearly 2% after witnessing some profit taking yesterday.

BHEL is the top Sensex gainer, up over 3%. Other notable gainers include Infosys, GAIL, Bharti Airtel, JSPL and Hero Moto.

On the losing side, HDFC, Wipro, Hindalco, TCS, ICICI Bank, RIL, NTPC and Cipla have slipped between 1-2%.

Among other shares, IFCI has surged 17% to Rs 33.10 on back of heavy volumes on the counter.

Schneider Electric Infrastructure has soared 9% to Rs 99 after its promoters have made an open offer to acquire additional 26% stake at price of Rs 83.10 per share.

The broader indices have outperformed the benchmarks – BSE Midcap and Smallcap indices are up nearly 1% each.

The market breadth remains healthy with 1,469 advancing and 925 shares declining.