Sensex takes a breather; weak oil prices weigh

REUTERS - India's stock markets were little changed on Wednesday after hitting their highest level in more than three months earlier in the session, as Tata Consultancy Services fell on weaker-than-expected margins, while Asian equities languished following a drop in oil prices.

Oil prices skidded after Kuwaiti oil workers ended a three-day strike that had cut the nation's crude output by around half, with worries about an oversupplied market returning to the fore.

But overall sentiment remained supported after data this month showed easing inflation and a government forecast for an above-average monsoon rains sparked hopes of more rate cuts by the central bank.

"Monsoon forecast has been above normal, so market is expecting another rate cut some time," said Ajay Bodke, CEO and chief portfolio manager at Prabhudas Lilladher.

The broader NSE Nifty was up 0.09 percent at 1.51 p.m., after earlier rising as much as 0.5 percent to its highest level since Jan. 4. The benchmark BSE Sensex was down 0.07 percent.

Stock markets were closed on Tuesday for a holiday.

Tata Consultancy Services was among the biggest drags, falling 2.3 percent after the software services exporter's fourth-quarter margins came in below expectations.

Meanwhile, oil stocks dropped with Reliance Industries down 2.2 percent and Bharat Petroleum Corp 1.4 percent lower.

Recent outperformers fell, with cigarette maker ITC Ltd down 0.2 percent after gaining 4 percent in the previous two sessions.

Housing Development Finance Corp rose 1 percent after the mortgage lender said it planned to list up to 10 percent of its life insurance joint venture with Britain's Standard Life Plc .

Tata Steel surged 5.8 percent after Sky News reported that managers at Tata's Port Talbot steelworks have been briefed about a potential management buyout plan, citing sources.

(Reporting by Aastha Agnihotri in Bengaluru; Editing by Subhranshu Sahu)