Sensex, Nifty flat; IT stocks jump on strong Accenture Q4

Indian markets have opened flat Wednesday as traders looked to consolidate positions after the huge upside that sent the Sensex up 473 points on Tuesday. At 0943 hours, the Sensex and Nifty were nearly unchanged from yesterday's closing levels.

However, IT stocks continued to see buying interest. The BSE IT index jumped over 2.5 per cent on strong earnings from global IT major Accenture that indicated little impact on IT spending because of recession fears so far. A falling rupee has also contributed to the upside in tech stocks over the past few days.

All frontline IT stocks were trading with big gains. Infosys was the top gainer on the Sensex, rising over 3 per cent. Wipro advanced 2.5 per cent while TCS was trading with nearly 2 per cent gains.

Most other group of stocks was trading lower. Banking and metal stocks saw nearly 0.5 per cent cuts in early trade.

On the Sensex, only 8 of the 30 stocks were trading higher. Barring IT stocks, Tata Motors and ONGC saw some buying interest. Among the laggards, Sterlite was the top loser falling nearly 1.5 per cent. ICICI Bank, Hindalco, HUL and M&M were trading with over 1 per cent cuts.

On the broader BSE 500 index, 57 per cent stocks were trading higher, indicating positive breadth for the markets.

Sarvendra Srivastava of Emkay Global described Tuesday's gains as a short term bounce in a medium term downtrend. Mr Srivastava added that the Nifty is unlikely to fall below 4,600-4,650 levels and investors could start buying at 4,700-4,800 levels.

Mehraboon Irani of Nirmal Bang Securities said the trend continued to remain down but this was not the best time to go short. Mr Irani added that the worst level for Indian markets was around 4,300-4,400 on the Nifty and 14,000-14,500 on the Sensex.

"Over the next 3-5 months, India will be better placed than most emerging markets because inflation would be behind us... commodity prices have been falling and the rupee is likely to appreciate a little... but for the time being pain is there," Mr Irani said.

Asian markets rose in early trade on signs that European leaders were working on new plans to avert a debt crisis. Germany's chancellor Angela Merkel said her country would do whatever it could to help Greece regain investors' confidence.

South Korea's Kospi index and Japan's Nikkei were trading in the green, after giving up some of the early gains. However, Hong Kong's index Hang Seng was down nearly 1 per cent.

Overnight, the Dow rose 147 points, or 1.3 per cent, to close at 11,190.