Sensex holds 27,400; RIL, Tata Motors down over 1%

Markets pared early gains in late morning trades as investors booked profit at higher levels after reports suggest that retail inflation is likely to be on the higher side. The government will detail November IIP and December CPI data later today.

At 11:40AM, the 30-share Sensex was down 22 points at 27,436 and the 50-share Nifty was trading flat at 8,285.

The Indian rupee was trading higher at 62.17 against the US dollar compared to Friday's close of 62.32 tracking equity gains in the previous sessions.

Meanwhile, foreign institutional investors were net sellers in Indian equities to the tune of Rs 298 crore on Friday, as per provisional stock exchange data.

Shares in China extended losses and the benchmark Shanghai Composite was down 2.2% while Hang Seng was up 0.2% and Straits Times was trading flat. Meanwhile, financial markets in Japan were closed on account of Coming of Age (Adults') holiday.

Coal India was the top Sensex loser down over 4%. Media reports suggest that the government is planning to reduce its stake in Coal India by 10%.

Oil shares are under pressure on further decline in crude prices. RIL has lost over 1% while ONGC and GAIL have declined around 0.5% and 1.1% each. Reliance Industries Chairman Mukesh Ambani announced Rs 100,000 crore investments across businesses in the next 12-18 months and said India was on the path to become the world's fastest growing economy.

Other Sensex losers include, TCS, Tata Motors, Bharti Airtel and Mah&Mah among others.

FMCG shares were among the top gainers on hopes that lower commodity prices would boost margins in the third quarter. HUL has gained over 2% and is nearing Rs 900 levels on sustained buying after a couple of foreign brokerages upgraded the stock. ITC was up 0.2%.

Infosys extended gains and was up 0.9% after the IT major last week announced third quarter earnings which beat street estimates.

Other Sensex gainers include, Axis Bank, SBI, Sun Pharma and Dr Reddy's Labs among others.

Among other shares, United Spirits is trading higher by 4% to Rs 2,960 on National Stock Exchange (NSE) after the company said its minority shareholders have approved a proposal to enter into licensing and cost sharing agreements with certain subsidiaries of its parent Diageo Plc.

In the broader market, the BSE Mid-cap and Small-cap indices were up 0.6-0.7% each.

Market breadth was strong with 1,448 gainers and 957 losers on the BSE.