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After touching a fresh high at about 1030 hrs, the markets pared their gains, with the Sensex at 18,656 up 127 points and the Nifty at 5,585 up 34 points.

Hindustan Unilever continued to dominate the Sensex toppers list up 4% at Rs 296, followed by Reliance Communications at Rs 92 up 3% and NTPC at Rs 177 up 2.5%. Sterlite Industries, ONGC and ITC added 2% each.

HDFC Bank was the top loser on the BSE benchmark down 1% at Rs 2,262. Tata Power at Rs 1,253 and ICICI Bank at Rs 1,080 were amongst the other major losers, although they were down only 0.4% and 0.3% respectively. HEro Honda and Tata Steel were the only other Sensex components in the red.

In the broader markets, the Mid-cap index was flat at 6,898, while the Small-cap index moved in line with the benchmark at 8,394  up nearly 1%.

The FMCG counter added 2% at 3,752, with Hindustan Unilever, up 4%, pushing the index up. IT stocks saw a lot of buying with the dollar's fall, a positive sign for domestic software exporters; the index climbed 1% to 6,112, followed by the Auto index at 3,660 up 1%.

Only two sectoral indices were in the red; the Consumer DUrables counter at 6,172 and the Bankex at 12,590 were off 0.4% and 0.3% respectively.

With 1,366 advances and 916 declines, the market breadth remained positive.