Stocks stumble on Fed cues, but stay positive

The benchmark Sensex, which stayed up for the most part of the day, hit a high of 31,937.51

Stocks consolidated their gains today after US Fed minutes signalled uncertainties over near- term rate hikes.

RBI's own concern over inflation in its minutes dragged banking stocks down. Auto and healthcare shares too registered losses.

"Investors showed confidence despite some volatility after the US Fed's minutes stating uncertainties over near term rate hikes due to benign inflation. The opportunity from recent correction and the announcement of share buyback from IT major supported sentiment," said Vinod Nair, Head of Research, Geojit Financial Services.

The benchmark Sensex, which stayed up for most part of the day, hit a high of 31,937.51 on the back of rally in the Infosys stock following the company's buyback proposal and unabated buying by domestic institutional investors.

Source: Bloomberg Compiled by BS Research Bureau

However, it succumbed to profit-booking before closing up by 24.57 points, or 0.08 per cent, at 31,795.46. The gauge had gained 557.30 points in the previous two sessions.

The NSE Nifty, after recapturing 9,900, advanced to hit a high of 9,947.80, but ended at 9,904.15, up 6.85 points, or 0.07 per cent.

Infosys, the country's second largest IT exporter, zoomed most by 4.54 per cent, after the company said the board will take up a proposal for buyback of shares on Saturday, helping the key indices post gains for the third day in a row.

Mid- and small-cap indices closed mixed.

Traders said volatility crept in due to emergence of sudden selling in the last half an hour of the session, which took away much of the day's gains.

Global leads were not too supportive as Asian shares remained indecisive and European stocks opened lower despite easing tensions involving North Korea.

Coal India was the second-biggest mover (4.22 per cent). NTPC and Bharti Airtel advanced too.

While IT, technology, PSU indices all firmed up, selling pressure pushed down rate-sensitive stocks such as auto and banking.