After last Friday's spectacular rally, markets are holding on with modest gains in early trades. The indices opened firm, but declined soon after before recovering again. Major Asian indices, except South Korea and Singapore, are trading with modest gains.

Sensex opened at 10617 rallied to a high of 10685 before declining to a low of 10589. The index is trading higher by 33 points at 10643 at 11.10 AM.

Nifty opened at 3129 and touched a high of 3154 before slipping to a low of 3119. The index is trading higher by 7 points at 3135.

Technology stocks are doing very well in early trades as the companies get ready to announce first quarter results over the next two weeks. TCS is leading the sector and is the biggest gainer among index stocks with gains of 2.5 per cent higher.

Satyam and Infosys have added around 1.5 per cent each.

Aluminium stocks have perked up after Hindalco announced a product price hike. Nalco has gained nearly 2.5 per cent and Hindalco is trading almost 1.5 per cent higher.

Oil marketing stocks are doing well on unconfirmed reports of a liberalised product pricing policy being formulated by the government. HPCL has gained 2.5 per cent and BPCL is trading over 2 per cent higher.

Maruti has added nearly 1.5 per cent on excellent sales volumes for the month of June.

Glaxo, SBI and HLL are among the other major gainers.

HDFC, of the major gainers from last week, is the biggest loser among index stocks in early trades today. The stock is now trading nearly 3 per cent lower.

Among other banking stocks, HDFC Bank and PNB have lost nearly a per cent each.

Engineering stocks are witnessing some amount of profit booking after last week's gains. Siemens is down nearly 1.5 per cent and ABB has given up nearly a per cent.

Index heavyweights Reliance Industries and ONGC are trading with marginal losses.

Sun Pharma, Zee Tele, Grasim and Bharti Airtel are among the other major losers.

Mid-caps and small caps are holding on to the higher levels seen Friday even on the face of volatility in large caps. Most of the popular mid-caps are consolidating and there are not many stocks, which have corrected substantially.

The mid-cap index is now trading with gains of around 0.3 per cent. Market breadth on the NSE is modestly positive with more than one stock advancing for every declining stock.

BSE mid-cap and small-cap indices are also trading with gains of around 0.5 per cent each.

RNRL is locked in the 5 per cent upper circuit on unconfirmed reports that the R-ADAG group may get long lease of some coal mines.

Prime Focus, Hyderabad Industries, Unitech, Nectar Life, Subhash Projects and McLeod Russell are among the major mid-cap gainers.

Malwa Cotton, Sudarshan Chemicals, Vishesh Info and Eicher Motors are the major mid-cap losers.