Markets trade flat, Cairn India slides 1%

Markets pared all the gains made in the opening trades and were trading flat due to profit booking in oil & gas shares. The S&P CNX Nifty twas trading at 5,529, up 1 point after touching a high of 5,558 and the benchmark Sensex was up 20 points, at 18,430.

Markets across Asia were trading higher as banks recovered on hopes that Greece would not default. Japan's Nikkei Stock Average was up 1.1%, Hong Kong's Hang Seng added 0.5% led by exporter shares and China's Shanghai Composite gained 0.6%.

Analysts said that weak commodities underpinned the rally in the past few sessions. Brent crude bounced back and was hovering around $106/bbl.

Emkay research in the morning note said the index bounced from support of 5250 levels to 5526 levels in last four sessions. However, futures continued to see closure of positions (open interest declined to 2.71 crore shares from 2.83 crore shares) indicating bounce back is largely on account of short covering.

With no accumulation, Emkay said that the up move would be short lived.  Derivative analysts said that the rally may be capped around 5600-5665 levels on the Nifty.

Going forward markets remain jittery as they head towards derivative expiry on Thursday.

Among individual stocks Cairn India was down 1% on reports that Vedanta Resources would buy another 10% in the Indian arm of Cairn Energy as restructuring of the delayed deal that will lead to reduction in the price tag by more than $600 million.

BSE Oil & Gas was the top sectoral loser after the rally seen yesterday; the index was down 0.5%. Indian Oil Corporation, GAIL India and HPCL declined 1.3% and BPCL was off 1.1%.

Buying emerged in the defensive healthcare space, the BSE Healthcare index was up 0.9%. Jubilant climbed 2.7%, Dr. Reddy’s Lab was up 1.7% and Piramal Healthcare gained 1.1%.

From the broader markets the midcap and the smallcap indices were up 0.5% each.

Among the Sensex stocks, Bharti Airtel added 2.3%, Sterlite Industries advanced 1.5% and BHEL was up 0.9%.

Market breadth was positive, 1023 stocks advanced for 654 stocks which declined.