Nifty recovers to end flat; Hero Honda surges 18%

The equity benchmarks recovered smartly in the second half of trade to end flat; the Sensex did touch 20,000 level, but could not hold the same. The indices started the trade on a weak note today following weak Asian cues and on the back of profit booking.

Auto, technology, cement and select metal companies' shares along with Cipla, HDFC, HUL and BHEL supported the markets to end in the green. Even Reliance Industries was quite supportive, but it wiped out its gains in late trade.

However, the sell-off was seen in financial, power and telecom companies' shares along with ONGC, Dr Reddy's Labs, Sterlite, ITC, DLF, L&T and Ranbaxy Labs, which limited gains to just 24 points on the Sensex.

Jonathan Garner, chief Asian and emerging market equity strategist at Morgan Stanley is more cautious on India. "Certainly for India, indeed for Asia, generally, we are more cautious than some of our competitors. Policy rates still have to rise in Asia and that includes India. The mid to late phase of the economic cycle and inflationary pressures, particularly, input side inflationary pressures from rising metals prices, rising agricultural and commodity prices, are starting to impact corporate margins," he said.

"We are somewhat concerned about the impact that may have on earnings growth and we are expecting lower earnings growth in the consensus," he added.

The 30-share BSE Sensex closed at 19,888.88, up just 24.03 points over previous closing value and the 50-share NSE Nifty fell 1.7 points to 5,947.05. Even the broader indices ended flat.