Sensex ends up 331 points, Nifty above 7600; infra, banks gain

03:50 pm New government impetus: The finance ministry has prioritised resolution of tax disputes involving telecoms companies, telecoms minister Ravi Shankar Prasad said.

Vodafone Group PLC became India's largest overseas corporate investor when it acquired Hutchison Whampoa's Indian mobile assets in 2007 as part of its strategy of chasing growth in emerging markets.

Indian authorities argued that the transaction was liable to be taxed in India. Vodafone rejected the claim, saying that even if tax was due, it should be paid for by the seller rather than the buyer. The $2.2 billion standoff has played out in courts across the country ever since.

03:40 pm market closing: After a sluggish trading day, the market finally woke up in final hour. The Sensex ended up 330.71 points or 1.31 percent at 25521.19 and the Nifty was up 98.15 points or 1.3 percent at 7631.70. About 2045 shares advanced, 948 shares declined and 110 shares were unchanged.

Banks, capital goods, oil& stocks and metals provided the last hour support to market.

ONGC, Axis Bank, SBI, Coal India and BHEL were top gainers in the Sensex. Among the losers were M&M, Hero MotoCorp,  Dr Reddy's Labs, HUL and Bajaj Auto.

03:30 pm Iraq war: Sunni Muslim militants attacked a northern Iraqi village inhabited by Shi'ite ethnic Turkmens but were repelled, police said on Tuesday, highlighting an upsurge of sectarian violence after stunning advances by jihadi fighters.

The militants were beaten back from the village of Basheer, 15 km (9 miles) south of the city of Kirkuk after an hour of clashes with local militia and police forces.

The government of Shi'ite Prime Minister Nuri al-Maliki is seeking to repel the Sunni militants who have seized several cities over the past week.

Fighters from the Islamic State of Iraq and the Levant (ISIL) and other Sunni militants have swept through towns in the Tigris valley north of Baghdad in recent days but appeared to have halted their advance outside the capital on Sunday as they tightened their grip on the north.

03:20 pm Agri push: Despite monsoon concerns looming large, the Agriculture Ministry sources have told CNBC-TV18 that they are fully geared up to tackle any situation arising out of drought-like situation.

The Agriculture Ministry officials are meeting state government officials to review the situation.

The sources have confirmed that as of now they don't see any drought-like conditions. However, if at all such a situation arises, then the government is fully ready with contingency measures.

A cabinet note too has been prepared in this context, which can be sent for an immediate approval. The cabinet note contains a six-pronged strategy on drought-mitigation measures and includes providing diesel subsidy and subsidy on procurement of seeds to farmers belonging to the drought-hit areas. It also contains note on rescheduling of crop loans and interest subvention on rescheduled loans in drought-affected areas.

03:00pm Idea Cellular and Cairn India in news
Idea Cellular surged 4 percent as weight of the stock in MSCI Global standard increased to 0.8 percent from 0.65 percent from June 18 by MSCI.

Cairn India climbed over a percent as media report suggested that the company received environment nod to raise production from its Rajasthan block to 3 lakh barrels per day.

02:55pm Coal India gains 2.7%
CLSA maintains a buy rating on the stock with a target price of Rs 440 per share. The brokerage is optimistic that Coal India's volume and earnings growth will see an improvement from here as the new government is likely to drive its production and earnings growth trajectory.

"A full break-up of Coal India could infuse higher competition in the sector while an internal restructuring of the company has the potential of substantially improving the company's internal efficiency levels,'' CLSA said in a report.

The new government's target to eradicate power problems in India will also facilitate faster production growth at Coal India, it added. Faster environmental clearance, government support on land acquisition and easing of logistical constraints are some of the other key triggers, according to CLSA.

02:50pm Private power developers want bidding for UMPPs to be halted
Association of Power Producers, a body representing private electricity generation companies, has asked the power ministry to halt the bidding process for two proposed 4,000 MW ultra mega power projects in Tamil Nadu and Odisha, saying the projects are not economically viable.

Many power companies, including Adani, CLP, GMR, Jindal Steel & Power, JSW Energy and Tata Power are unwilling to submit price bids under the new bidding documents, Association of Power Producers (APP) said in a letter to Power Minister Piyush Goyal.

These companies have also asked for a comprehensive review of the standard bidding documents (SBDs) and the DBFOT (Design Build Finance Operate and Transfer) model by the government, reports PTI.

02:45pm Market Update
The market extended gains with the Sensex rising over 303.44 points or 1.20 percent to 25493.92 and the Nifty gaining 90.05 points or 1.20 percent to 7623.60 supported by banks, oil & gas and capital goods stocks.

The BSE Midcap and Smallcap indices rose 1.25 percent and 1.8 percent, respectively. More than two shares advanced for every share declining on the BSE.

02:40pm Leaders
India's largest lenders State Bank of India and ICICI Bank rallied 2-3 percent while rival Axis Bank surged 4 percent. Petrochemical major Reliance Industries and state-run oil major ONGC jumped 1.4 percent and 3 percent, respectively.

Engineering and construction major Larsen & Toubro, commercial vehicle maker Tata Motors, top telecom operator Bharti Airtel and state-run gas utility climbed over 2 percent.

02:35pm Insecticides India gains post management commentary
Rajesh Agarwal, chairman, Insecticides India says FY14 was a tough year for the company, but greener pastures lie ahead.

Agarwal expects FY15 to be an advantageous year with the new government focusing on irrigation.

''We expect to grow 35 percent on the topline and touch Rs 1200 crore. We also expect to grow Rs 70-75 crore on the bottomline,'' he adds.

Agarwal, however, is at ease with the threat of El Nino affecting monsoon. If according to forecasts, the rainfall is 90 percent of the long period, then there won't be any issue.

02:30pm Cipla in news
Cipla says Cipla (Mauritius), a wholly owned subsidiary of the company has signed a definitive agreement with the company's existing Sri Lankan distributor for acquisition of 60 percent stake in a new company which will market the company's products in Sri Lanka. The consideration payable for the transaction is USD 14 million and the proposed acquisition is subject to regulatory approvals, it adds.

02:25pm Railway fair hike possible?
Reeling under severe financial crunch, the Railways board is learnt to have recommended a hike in rail fares.

The recommendation comes days ahead of the Budget, which is expected in the second week of July. However, Railway Minister Sadananda Gowda will meet Prime Minister Narendra Modi before taking a final call.

According to sources, the Prime Minister is against a sharp rise in passenger rail fares. However, he has been apprised with the situation that a fare hike is an absolute necessity, said sources, adding that the board has recommended a marginal, up to 5 percent, hike in freight fares.

Cash-strapped Railways, which is losing Rs 30 crore a day, was hoping to garner Rs 8000 crore through the increase in passenger fares and freight charges last month. The cross-subsidy on passenger fares has touched Rs 26,000 crore.

02:15pm Reliance Industries says the 40th Annual General Meeting (AGM) of the company will be held on June 18, 2014. (Disclosure: Reliance Industries has made an open offer for the takeover of Network18, which owns Moneycontrol.com and other digital, print and TV channels).

02:00pm The 50-share NSE Nifty gained solid strength, climbing above the 7600-mark supported by Reliance Industries, ICICI Bank and ONGC.

The Sensex rallied 264.26 points or 1.05 percent to 25454.74 and the Nifty rose 79.65 points or 1.06 percent to 7613.20. About 1840 shares have advanced, 1019 shares declined, and 115 shares are unchanged.

The Indian rupee recovered quite sharply from its 7-week low of 60.47 a dollar touched in early trade today to 60.13 now, up 4 paise compared to previous day's close.

Investors will closely watch the FOMC meet that will begin tonight for two days. Most of experts feel the Federal Reserve may cut monthly fiscal stimulus by another USD 10 billion to USD 45 billion.

2:00 pm Fund raising plans: With change in sentiment post the Modi government coming to power, many companies are planning to raise funds. In 2014 alone, four companies have already raised money through QIP. V Jayasankar of Kotak Investment Banking says there are 15-20 companies that have taken enabling resolution for QIP. Lots of companies have started the initiating process for IPOs too.

He expects primary market to absorb atleast 50 percent of FII flows, so there is no asset bubble. Many investors feel most sectors have run up on optimism and supply of paper into the market will be positive for Indian equities, he adds.

1:50 pm Rajan slams FSLRC report: The Reserve Bank of India governor Raghuram Rajan Tuesday warned that too much legal supervision on the actions of regulators would hamper policy making, and increase risks in the system.

He was critical of the Financial Sector Legislative Reforms Committee report's recommendation that exercise of regulatory judgment as well as policy decisions by bodies like SEBI, RBI and FMC be subject to legal appeal.

"Not everything the regulator does can be proven in a court of law," Rajan said, adding that a lot of regulatory action stemmed from sound judgment based on years of experience.

He also slammed the FSLRC's proposal to merge regulators as 'faddish' and 'impressionistic', and not based on deep analysis.

1:40 pm Buzzing: Shares of Coal India were up 1.5 percent intraday. CLSA maintains a buy rating on the stock with a target price of Rs 440 per share. The brokerage is optimistic that Coal India's volume and earnings growth will see an improvement from here as the new government is likely to drive its production and earnings growth trajectory.

"A full break-up of Coal India could infuse higher competition in the sector while an internal restructuring of the company has the potential of substantially improving the company's internal efficiency levels,'' CLSA said in a report.

The new PM, Narendra Modi, was said to be exploring breaking up the company and opening up the sector. Coal India accounts for 80 percent of India's total coal output but has been miserably lagging behind its targets.

1:30 pm Alert CNN-IBN sources say: PM is against sharp rise in passenger rail fares. He says marginal hike in freight fares expected, may be up to 5% percent. Railway board recommends hike in rail fares.

1:20 pm Rupee: Post elections, the rupee witnessed a decent rally on improving macro-economic conditions and a favorable political win. But the home currency has weakened since and may spike up to 62 a dollar if Brent crude breaks USD115-120, says Brijen Puri, Head of Markets at JP Morgan. He, however, calls this disruption short-term as geo political problems never had long-term repercussion on India.

Giving a clear picture of the fundamental situation, Puri said the RBI has fairly robust dollar reserves and it has been active in managing volatility. Besides our current account is stable. Thus what we are seeing is a short term spike, which can be contained. He advised exporters - who are looking to hedge or those who have long term view - to take the opportunity to enter at the current levels. 

The market is flat tracking weak cues from the global markets. The Sensex is down 5.17 points at 25185.31 and the Nifty up 2.75 points at 7536.30. About 1577 shares have advanced, 1103 shares declined, and 125 shares are unchanged.

GAIL, ONGC, Bharti, Maruti and Axis Bank are top gainers in the Sensex. Among the losers are M&M, Hindalco, HDFC, Tata Steel and Bajaj Auto.

Globally, Asian markets trade cautiously as tensions of deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for risk. All eyes now on the US FOMC that begins its two-day meeting today.

The market is expecting the Fed to continue tapering its quantitative easing program by USD 10 billion and is watching the interest rate guidance and economic projections closely.

12:58pm Brent crude update
Brent crude futures held near USD 113 per barrel with the United States considering air strikes in Iraq as the security situation worsens in the key oil producing country.

Islamic militants have routed Baghdad's army and seized the north of the country in the past week, threatening to dismember Iraq, although 3.3 million barrels per day of oil exports remain unaffected.

President Barack Obama met with top national security advisors on Monday to consider options for military action to support Iraq's besieged government, reports Reuters.

12:50pm Cairn India in focus
Cairn India has received environmental clearance for raising crude oil production from Rajasthan block to 2,00,000 barrels per day.

The company yesterday received approval to augment hydrocarbon production from the RJ-ON-90/01 Block in Barmer to 3,00,000 barrels of oil per day (bopd) from the current limit of 2,00,000 bopd, sources said.

12:40pm Puravankara Projects up 4.6%
South-based Puravankara Projects has launched theme based villa project on Bannerghatta Road (in Bengaluru) called ''The Sound of Water''. "Inspired by the finest elements of a rainforest, and 35 feet high artificially created waterfall makes it one a unique residential project in the country," says the company in its release.

The project will cover 20 acres of land, which will have 209 villas ranging between 3009 square feet and 4723 square feet, with an approximate base price of Rs 1.92 crore to Rs 4.15 crore respectively.

12:30pm Interview
Rajesh Agarwal, chairman, Insecticides India says FY14 was a tough year for the company, but greener pastures lie ahead.

Agarwal expects FY15 to be an advantageous year with the new government focusing on irrigation.

''We expect to grow 35 percent on the topline and touch Rs 1200 crore. We also expect to grow Rs 70-75 crore on the bottomline,'' he adds.

Agarwal, however, is at ease with the threat of El Nino affecting monsoon. If according to forecasts, the rainfall is 90 percent of the long period, then there won't be any issue.

12:20pm Pennar Industries on buyers' radar
Pennar Industries and its subsidiaries have received orders worth Rs 105 crore from Ultratech, Reliance Industries, Abhir Infra, Integral Coach Factory (ICF), BGR Energy, JSW and SRK Engineering among others.

12:10pm FII View
Though Herald van der Linde of HSBC agrees that there has been optimism on reforms, he feels inflation still remains a risk.

Herald van der Linde says he is unlikely to put incremental money into India at this point in time as valuations look stretched. Besides, the Reserve Bank of India's statement doesn't suggest rate cuts in the near term.

He feels implementation of reforms is key for market to rise further and may boost corporate profitability as well, but that may take some time. He said he will look to buy into Indian markets once valuations come down.

12:00pm The market remained lacklustre in noon trade as two-day FOMC meet that will start tonight made investors cautious. Media report suggests that Federal Reserve may reduce monthly fiscal stimulus by another USD 10 billion to USD 45 billion.

The Sensex rose 1.25 points to 25191.73 while the Nifty fell 2.30 points to 7531.25 but the BSE Midcap gained 0.5 percent and Smallcap climbed over a percent. Advancing shares outnumbered declining ones by a ratio of 1558 to 958 on the BSE.

ONGC, Bharti Airtel, Maruti Suzuki, Axis Bank, Gail, HCL Technologies, UltraTech Cement and Ambuja Cements gained 1-3 percent. However, HDFC, M&M, Tata Power, Hindalco Industries, Hero Motocorp, DLF and United Spirits dropped 1-2 percent.

In the midcap space, Jaypee Infratech, WABCO India, IRB Infrastructure, Puravankara Projects and HMT surged 4-11 percent whereas Suzlon Energy, Birla Corp, Jagran Prakashan, P&G and Amtek India lost 2-5 percent.

12:00 pm FM's combat against inflation: The government is committed to easing bottlenecks that have caused inflation to spike, Finance Minister Arun Jaitley said, blaming energy costs and "speculative hoarding" for a rise in wholesale prices that contributed to an investor selloff on Monday.

The rupee sank below 60 per dollar to the dollar and government bonds had their biggest single-day fall in a month on Monday as higher-than-expected May inflation compounded worries about the impact of violence in Iraq on the price of oil, which India imports.

"The rise in prices of food articles can also be attributed to withholding of stocks on account of apprehension of a weak monsoon," Jaitley said in a post on Facebook late on Monday.

11:50 am More oil: Cairn India has received environmental clearance for raising crude oil production from Rajasthan block to 2,00,000 barrels per day.

The company yesterday received approval to augment hydrocarbon production from the RJ-ON-90/01 Block in Barmer to 3,00,000 barrels of oil per day (bopd) from the current limit of 2,00,000 bopd, sources said.

11:40 am Fifa for markets: Herald van der Linde of HSBC is rooting for the Dutch team in the FIFA World Cup in Brazil and hopes another 5-1 win for Holland in the next match. As far investment is concerned, his Robin van Persie among the emerging market basket is definitely China, due to ''some signs of economic recovery and low valuations''.

On India, though he agrees that there has been optimism on reforms, he feels inflation still remains a risk.

Linde said he is unlikely to put incremental money into India at this point in time as valuations look stretched. Besides, the Reserve Bank of India's statement doesn't suggest rate cuts in the near term.

He feels implementation of reforms is key for market to rise further and may boost corporate profitability as well, but that may take some time. He said he will look to buy into Indian markets once valuations come down.

He sees good value in private banks led by asset recovery.

11:30 am Buzzing: Shares of Ricoh India plunged 20 percent as its delisting offer has failed. The stock had gained around 17 percent in a month.

''The acquirer has rejected price of Rs 225 per share, where the total number of shares to be acquired for successful delisting offer were tendered, as per website of BSE Limited,'' it said in a statement.

The promoter Ricoh Asia Pacific wanted to acquire 26.4 percent or 0.49 million shares of the company rom the public shareholders. In May, the company had announced a delisting offer at floor price of Rs 58 per share, indicative price of Rs 120 per share.

11:20 am Rajan's views: Reserve Bank governor Raguram Rajan pointed out the shortcomings in the Financial Sector Legislative Reforms Committee (FSLRC) Report. Speaking at the first State Bank Banking and Economic Conclave, Rajan warns against over regulation. He said he intends to take more steps on financial inclusion and hopes the government takes crucial policy measures on infratsructure sector soon.

For now, Rajan said, RBI will stay focussed on combating inflation. He also pointed out that India is far behind other economies in solving issues of distressed financial institutions.

The market continues its sluggishness as the Sensex is down 36.22 points at 25154.26. The Nifty is down 9.55 points at 7524.

About 1443 shares have advanced, 860 shares declined, and 95 shares are unchanged.

ONGC, Bharti Airtel, Axis Bank, GAIL and TCS are top gainers in the Sensex. Among the losers are Tata Steel, HDFC, Tata Power, M&M and Hero MotoCorp.

The rupee tumbled to a seven-week low against the US dollar amid ongoing geopolitical tensions in Iraq, and as a sharp rise in India's wholesale price index-based inflation in May weighed on sentiment. 
 
Government bond prices were down today as the escalating violence in Iraq continued to dampen market sentiment and pose a threat to oil production in the south of Iraq.

All eyes continue to be on crude. Yesterday US and global oil prices diverged as investors remained focus on possible repercussions on instability in Iraq. Brent is trading at levels of 112.64 dollars while gold prices are flattish.

Asian markets trade mixed today with investor risk appetite cautious on a triple blow over developments in Iraq, Ukraine and Argentina.

10:59am Crude may rise further
Iraq is unlikely to end up in civil war, and the recent measures taken by the US will help bring the situation under control, feels Majid Rafizadeh, political scientist and policy analyst.

In an interview to CNBC-TV18, Rafizadeh says the US will take at least two weeks to diffuse the situation in Iraq.

In the interim, Rafizadeh sees crude prices surging further, but expects Saudi Arabia to increase oil supply to make up for the shortfall arising from the situation in Iraq.

10:50am Cairn India on buyers' radar
Cairn India has received environmental clearance for raising crude oil production from Rajasthan block to 2,00,000 barrels per day. The company yesterday received approval to augment hydrocarbon production from the RJ-ON-90/01 block in Barmer to 3,00,000 barrels of oil per day (bopd) from the current limit of 2,00,000 bopd, sources said, reports PTI.

10:40am Fulford India falls 5%
Shares of Fulford India, the subsidiary of Merck & Company, fell as much as 5 percent after hitting a record high of Rs 1,690 in opening trade as the company is seeking shareholders' approval for an indicative price of Rs 1,150 apiece decided by promoter Dashtag for delisting of shares from the exchange. The stock rallied 140 percent in past two months.

Dashtag, which held 74.96 percent stake in the company as of March 2014, in its letter says, "The indicative price currently approved by the board of acquirer (promoter) for the proposed delisting offer is Rs 1,150 per share. In this regard, reference is drawn to the notice for postal ballot dated May 9, 2014 sent by the company to shareholders."

10:30am RBI's focus
Reserve Bank governor Raguram Rajan pointed out the shortcomings in the Financial Sector Legislative Reforms Committee (FSLRC) report. Speaking at the first State Bank Banking and Economic Conclave, Rajan says he intends to take more steps on financial inclusion and the RBI's focus will be to combat inflation now. He also hopes the government will take crucial policy measures on infratsructure sector soon. He pointed out that India is far behind other economies in solving issues of distressed financial institutions.

10:20am Maruti shares in demand
Shares of Maruti rose 0.7 percent as Deutsche Bank is betting big on the stock. According to the brokerage, Maruti has a blue sky scenario with a potential to touch Rs 3750 per share (upside of 56 percent) over two years.

For the time being, Deutsche Bank maintains buy rating on the stock with a 15 percent increase in target price to Rs 2700 per share.

It feels that Maruti is well-placed to benefit from an upturn in domestic four-wheeler demand, particularly in entry-level compact cars which account for 24 percent and 35 percent of industry and the car maker's volumes, respectively. DB is betting on Maruti's expansion of market share. It feels Maruti may gain market share of 130 basis points and margin is likely to see an expansion of 180 bps to 13.5 percent by FY17.

''If Maruti were to maintain its current marketshare (42 percent), its FY17E volumes would stand at 2.0 million compared to our forecast of 1.75 million, resulting in a 'blue-sky' FY17E EPS of Rs 234,'' it said in a report.

10:10am Rupee Outlook
The Iraqi crisis and the poor WPI inflation numbers are taking a toll on the Indian currency, says Ashutosh Raina of HDFC Bank.

"The escalating tension in Iraq coupled with the WPI inflation data have resulted in USD/INR pair crossing the psychological figure of 60/dollar and settling above that level," he adds.

''The oil and other importers' demand is normal. This weakness is the result of traders squaring off their positions,'' adds Raina who expects the rupee to trade in the 59-61 range.

However, whether the currency will see anymore weakness now depends on the US yields, explains Raina.

10:00am Equity benchmarks continued to consolidate with the Nifty hovering around 7540 level. The index advanced 6.70 points to 7540.25 and the Sensex rose 14.01 points to 25204.49 but the broader markets outperformed benchmarks after seeing consolidation and sell-off in previous sessions.

The BSE Midcap and Smallcap indices gained 0.8 percent and 1.1 percent, respectively. More than two shares advanced for every share declining on the BSE.

Shares of ONGC, Gail, Bharti Airtel, Coal India, Sesa Sterlite, HCL Technologies, Cairn India and Asian Paints topped the buying list, rising 0.7-1.5 percent.

However, M&M, HDFC, Tata Steel, Dr Reddy's Labs, Bajaj Auto and DLF fell 1-1.5 percent.

Meanwhile, the rupee recovered from its day's low of 60.46 a dollar to 60.36, down 19 paise compared to Monday's close of 60.17.

10:00 am Market view: Investors are still underweight on India, infact most global funds are underweight on emerging markets as a whole, says independent analyst Sandip Sabharwal.

The harsh measures that Prime Minister Narendra Modi spoke about over the weekend should be good for India and the markets too, believes Sabharwal.

He says although there is limited downside from here for the markets, upside is not much either. This is likely to lead to a sector churn – towards low beta stocks like IT, FMCG and banks like HDFC Bank. He believes IT can be a short-term play till results come through. He expects most IT companies to report bad numbers. According to him, HDFC Bank has a couple of triggers ahead, including its fund raising plans. The private sector bank has indicated plans to raise Rs 10,000 crore. He is also bullish on HDFC.

9:50 am Market check: The market has turned mildly into green.  The Sensex is up 31.42 points at 25221.90 and the Nifty is up 11.15 points at 7544.70. About 1305 shares have advanced, 505 shares declined, and 47 shares are unchanged.

Bharti,  GAIL, Coal India, ONGC and Sesa Sterlite are top gainers in the Sensex while M&M, HDFC, Bajaj Auto, Hero MotoCorp and Dr Reddy's Labs are among the losers.

9:40 am Buzzing: Shares of Maruti rose around 1 percent intraday on Tuesday as Deutsche Bank is bullish on the stock. According to the brokerage, Maruti has a blue sky scenario with a potential to touch Rs 3750 per share (upside of 56 percent) over two years.

For the time being, Deutsche Bank maintains buy rating on the stock with a 15 percent increase in target price to Rs 2700 per share.

It feels that Maruti is well-placed to benefit from an upturn in domestic four-wheeler demand, particularly in entry-level compact cars which account for 24 percent and 35 percent of industry and the car maker's volumes, respectively.

''If Maruti were to maintain its current marketshare (42 percent), its FY17E volumes would stand at 2.0m compared to our forecast of 1.75m, resulting in a 'blue-sky' FY17E EPS of Rs 234,'' it said in a report.

9:30 am  FII view: Mahesh Nandurkar, CLSA says initial indications suggest that equity markets are opening up and a potential equity raising of USD 25 billion per year would be a positive for capex cycle recovery as bulk of the fund raising would be done by banks and infra/capital goods companies.

''Our preferred picks are ICICI Bank, SBI, Grasim and L&T. Also, empirical evidence suggests that large equity offerings don't necessarily imply a market correction,'' he adds

The market has opened in red as possibility of an Iraq civil war looms large. The Sensex is down 1.02 points at 25189.46 and the Nifty is down 8.50 points at 7525.05. About 349 shares have advanced, 216 shares declined, and 26 shares are unchanged.

L&T, HDFC, Reliance, SBI and M&M are major laggards while GAIL, TCS, Wipro, Tata Motors and Cipla are major gainers in the Sensex.

Support from international markets is unlikely with only US markets in the green. The Dow Jones Industrial Average ended 5.27 points ahead at 16,781.01 even as violence in Iraq shows no sign of abating. Asia is trading mixed on Iraq concerns.

The Indian rupee declined in early trade. It opened lower by 20 paise at 60.35 per dollar as against Monday's close of 60.15 a dollar.The dollar index lost momentum at 80.7 to end in the red ahead of the FOMC rate decision tomorrow, while the yen ruled at 4 month highs on account a heightened risk aversion in global markets.

Ashutosh Raina of HDFC Bank says, "The escalating tension in Iraq coupled with the WPI inflation data have resulted in USD/INR pair crossing the psychological figure of 60/dollar and settling above that level."

"The two-day FOMC meeting begins today and market will be keenly awaiting the outcome. We expect rupee to trade in a range of 60-60.50/dollar today," he adds
Precious metals, gold pared its early gains after the release of better than expected us economic data.