After the firm opening, the indices declined before noon and the Nifty slipped into the red. Strong gains in metal stocks and continued strength in telecom stocks and Reliance Industries have helped the markets to recover and go back to the early highs.
The Sensex is trading higher by 72 points at 11968 at 01.10 PM after touching a new lifetime intra-day high of 11988.
The Nifty is trading higher by 19 points at 3555.
Metal stocks are driving the early afternoon rally. Hindalco is the biggest gainer among index stocks, trading over 7.5 per cent higher at lifetime highs.
Tata Steel has surged nearly 5 per cent to its lifetime highs. SAIL has added close to 2 per cent.
Telecom stocks are holding firm, led by Reliance Communication. The stock has added close to 4 per cent. VSNL has gained nearly 3.5 per cent while MTNL is trading more than 2 per cent higher.
Tata Motors has made a strong comeback after many sessions of subdued trading. The stock has added more than 3 per cent. Bajaj Auto is the other gainer from the auto space, trading more than 2 per cent higher.
Reliance Industries is holding on to its early gains of close to 3 per cent.
Grasim and HCL Technologies are among the other gainers in large caps.
Sun Pharma is the biggest loser among index stocks, trading nearly 2.5 per cent lower. Among other pharma stocks, Ranbaxy and Cipla have given up around a per cent each.
HDFC has declined further and is trading more than 2 per cent lower.
TCS has declined further in early afternoon trades and is now trading nearly 1.5 per cent lower. Wipro has given up close to a per cent.
Bharti, Jet Airways and Reliance Energy are among the other losers.
Mid-caps managed to hold on to their gains even when the frontline indices came under pressure. Most sugar stocks have surged today as well and gains are visible in tea plantation stocks as well. The mid-cap index is trading nearly 0.8 per cent higher. Market breadth continues to be positive on the NSE.
Ispat Industries, which got re-listed after a capital restructuring, is trading at Rs22.85.
Sakuma Exports, Panacea Biotech and KCP Sugar are among the major gainers in mid-caps.
TCI Finance, Quintegra and Schenectady Herdillia are among the mid-cap losers.