Sensex, Nifty trade near day's high

Key benchmark indices were trading near day's high in mid-morning trade. At 10:25 IST, the barometer index, the S&P BSE Sensex, was up 221.33 points or 0.56% at 39,723.38. The Nifty 50 index was up 55.75 points or 0.47% at 11,916.85.

Trading could get volatile later today as traders roll over positions in the Futures & Options (F&O) segment from the May 2019 series to June 2019 series. The May 2019 F&O contracts expire today.

Metal shares were under pressure. National Aluminium Company (down 0.7%), Tata Steel (down 0.64%), Jindal Steel & Power (down 0.61%), JSW Steel (down 0.36%), Steel Authority of India (down 0.29%), Hindalco Industries (down 0.2%), Vedanta (down 0.06%) and Hindustan Zinc (down 0.02%), edged lower. NMDC was up 0.29%.

Auto shares declined. Eicher Motors (down 1.75%), Mahindra & Mahindra (down 1.73%), Escorts (down 0.94%), Hero MotoCorp (down 0.35%), TVS Motor Company (down 0.31%), Ashok Leyland (down 0.06%), Tata Motors (down 0.03%) and Maruti Suzuki India (down 0.01%), edged lower. Bajaj Auto was up 0.29%.

Shares of Manpasand Beverages plummeted 10% to Rs 57.10 after the officials of the company arrested for GST fraud were reportedly denied bail.

Broader market was trading higher. The BSE Mid-Cap index was up 0.08%. The BSE Small-Cap index was up 0.21%. Both these indices underperformed the Sensex.

The market breadth was tilted in favour of buyers. On BSE, 1117 shares rose and 1021 shares fell. A total of 121 shares were unchanged.

Overseas, Asian shares were mixed. Investors continue to watch for developments on the US-China trade front, with Beijing making threats this week.

The biggest Chinese newspaper warned the US on Wednesday that China would cut off rare earth minerals as a countermeasure in the escalated trade battle. China's threat came after President Donald Trump blacklisted Chinese telecom giant Huawei, which led to many chipmakers and internet companies cutting ties with the company.

US stocks fell on Wednesday as bond yields declined again, triggering concerns about the economic outlook. Increasing trade tensions in the China-US trade fight also weighed on markets.

The 10-year Treasury note yield fell to its lowest level since September 2017 before rebounding to about 2.26%. A yield curve inversion is seen by traders as a potential sign that a recession is in the horizon.

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