Markets turn flat in noon trades

Markets are showing volatility in a narrow range in noon trades. The Sensex after touching a low of 19,537, recovered smartly to break into green on news of an easing food inflation. However, persistent weakness in IT stocks took the index in red once again. The Sensex flat at 19,613. The Nifty was unchanged at 5,891.

"We have a positive view on the markets. We believe that earnings growth momentum is strong in India which will drive the returns for the investors," said Sarabjit Kaur Nangra, Vice-President (Research), Angel Broking.

Food inflation fell to 9.18% for the week ended March 26, the lowest level in almost four months, on the back of a decline in the prices of pulses.

Food inflation stood at 9.50% in the preceding week. The last time food inflation was lower than this level was during the week ended November 27 last year, when it was registered at 8.69%.

Crude continued to hover near its two and half year highs. Brent crude was trading at $121.86 per barrel at 1300 hrs. Higher crude oil prices have led analysts to believe that RBI may raise key short term term policy rates again in its annual monetary policy review on May 3.

Latest data from Sebi showed that foreign insitutional investors bought shares worth Rs 1,562.7 crore on Monday and Tuesday.

BSE IT index traded weak in noon trades and was down 0.7% at 6,603. Oil & gas and auto indices also slipped marginally in trades. Meanwhile, BSE realty index gained 1.6% at 2,540. Banking shares recovered from its lows and was up 0.5% at 13,413.

Investors would now be looking at the fourth quarter corporate results which would begin around the middle of April.

HDFC gained 2% at Rs 713. Hindalco jumped 1.7% to Rs 216 after metal prices rose in the London Metal Exchange. Tata Steel gained 0.8% at Rs 639.

Larsen & Toubro, Tata Power and DLF advanced 1% each in trades. ICICI Bank went up 1% to Rs 1,109 after acquiring 5.6% stake in Kingfisher Airlines. The airline stock was down 0.7% at Rs 47.70.

Hotel stocks rose on renwed buying interests. Hotel Leela surged 5% to Rs 42.45. Indian Hotels rallied 5% to Rs 90. EIH jumped 2.3% to Rs 88. Asian Hotels (North) was up 2% at Rs 232.

Meanwhile, NTPC shed 2% at Rs 187. TCS dropped 1.6% to Rs 1,204. Bharti Airtel, Maruti Suzuki and Sterlite slipped 1% each.

ONGC, HDFC Bank and Infosys were down in trades.

BSE market breadth was positive. Out of 2,871 stocks traded, 1,861 advanced while 921 declined.