Indices unable to hold early gains

Markets were in a celebratory mood in the morning after reports of the arrival of monsoon in coastal Kerala. The arrival of rains couple of days earlier than expected and the positive forecast from meteorological department helped the indices to overcome weak global cues.

Reliance group stocks continued to trade firm in early trades even after the company refused to comment on media reports about a settlement.

Bank stocks were the flavour of the day on speculation that the government may allow higher foreign investment limits in SBI. The stock gained close to 2 per cent in morning trades.

Power stocks like NTPC and Tata Power made strong gains early in the morning. NTPC had gained well over 4 per cent by early afternoon and Tata Power more than 2 per cent. The Sensex and Nifty managed to cross psychological marks of 6800 and 2100 respectively.

However, markets could not hold on to gains and a sudden bout of selling pressure saw the indices giving up all their gains in the last one hour. Some amount of profit taking was clear in Reliance stocks as they gave up all their gains. The power stocks also gave up most of their gains.

Weakness was visible in oil marketing stocks as the government continues to search for new calculations to avoid a politically dangerous fuel price hike. Metal stocks were also weak during the day.