A day after the government spent time with industry to promote its Make in India initiative, state-owned Bharat Heavy Electricals Ltd (BHEL) announced a foray into submarine manufacturing.

Better known for its power business, BHEL has tied up with Mishra Dhatu Nigam and Hindustan Shipyard (HSL), both government-owned, to form a consortium for building submarines.

Markets extended losses after opening marginally lower, amid weak global cues, with auto and capital goods shares leading the decline.

By 9:35, the Sensex was lower by 220 points at 27,611 mark and the Nifty slipped by 64 points at 8,291 mark.

Bharat Heavy Electricals today said it has commissioned the sixth unit of 412 MW Rampur hydel power project in Himachal Pradesh.

The state-owned equipment maker has now completed commissioning all the six units -- each having 68.67 MW generation capacity -- of the plant, operated by SJVN Ltd. The project is located on the Satluj river.

Markets opened flat but slipped into negative territory weighed down by profit taking in IT majors and index heavyweight ITC.

At 9:35AM, the 30-share Sensex was down 52 points at 28,392 and the 50-share Nifty was down 13 points at 8,512.

Benchmark share indices which had pared early gains rebounded after the first hour of trade, amid encouraging manufacturing growth, led by FMCG majors and select private banks.

At 10:40AM, the 30-share Sensex was up 64 points at 28,758 and the 50-share Nifty was up 20 points at 8,609.

Markets rebounded from their day's lows in late noon trades following a recovery in select financials and capital goods shares while FMCG major ITC continues to lead gains.

At 2:15PM, the 30-share Sensex was up 70 points at 28,407 and the 50-share Nifty was up 19 points at 8,482.

Shares of BHEL were up nearly 2% at Rs 262 after a foreign brokerage upgraded the stock to "buy"from "sell"earlier.

The upgrade is on the back of good orders, earnings, under performance and under ownership by institutional investors, Citigroup said. The brokerage said that the state-owned engineering major is now its top industrial pick and has also raised the target price to Rs 335.

Benchmark share indices remained rangebound after the first hour of trade as gains in Bharti Airtel and index heavweight Reliance Industries helped offset losses in IT majors and HDFC.

At 10:45AM, the 30-share Sensex was up 64 points at 28,242 and the 50-share Nifty was up 12 points at 8,443.

BHEL's Q2 net profit fell 72.5% to Rs 125 crore from Rs 456 crore in the year-ago quarter.

Net sales came in at Rs 6,027 crore compared to Rs 8,819 crore in the quarter ended September 30, 2014.

Markets recovered from day lows as strength in Infosys, L&T and Sun Pharma managed to cap losses in HDFC twins, TCS and Bharti Airtel. At 1045 hrs, the Sensex was down 185 points at 27,994 and the Nifty was down 13 points at 8,370.

However, the broader markets gave off their morning gains and turned flat with a positive bias. The midcap index was up 0.2% while the smallcap index was near yesterday's close.

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