Mumbai: The BSE Sensex was trading 0.6 percent higher on the back of firm Asian markets, but the gains were limited as energy major Reliance Industries slid on 33 million share sales, its third big equity fund raising in under four months.
Reliance Industries was trading down 0.7 percent at 1,094.20 rupees after falling as much as 3.3 percent in early deals.
"They are building a war chest for LyondellBasell acquisition. The stock is fairly priced. Not much upside is seen in the stock price for now," said Manish Sonthalia, fund manager of portfolio management services at brokerage Motilal Oswal.
Reliance Industries raised $763 million as it readies to buy bankrupt petrochemicals firm LyondellBasell.
By 11:04 a.m. (0534 GMT), the 30-share BSE Index was trading up 0.59 percent at 17,642.00 points, with only four of its components declining.
"The earnings season will be a deciding factor for now. It should set the direction for the market in the near term," Sonthalia said.
Software companies led the gainers, ahead of Infosys Technologies' December quarter results announcement on Tuesday, as investors expected better guidance.
Leading software services companies are set to report a fall in profit margins for the last quarter due to a firmer local currency, but demand for outsourcing is picking up as the global economy is showing signs of recovery.
"Infosys results will be a trend setter for other IT companies' performance. All eyes are set on the guidance. Infosys is likely to raise its EPS guidance marginally," Sonthalia added.
Infosys Technologies gained 1.4 percent while Tata Consultancy Services and Wipro Technologies rose 1.5 percent each.
State-run power producer NTPC was up 1.4 percent at 234.15 rupees after media reports over the weekend suggested the company may file a prospectus with the regulator for its follow-on offer this week.
The company could not be immediately reached for a comment.
India aims to sell shares of about 60 state-run firms in the coming years as the government races to raise funds for speedier reforms and to cover a widening fiscal deficit.
In the broader market, gainers were four times the number of losers in a volume of 293 million shares.
The 50-share NSE index was up 0.6 percent at 5,274.10.
Stocks on the move
Metals makers such as Sterlite Industries and Hindalco rose 1.1 percent and 1.2 percent respectively, as base metals prices rallied after stronger-than-expected Chinese data on Sunday.
MBL Infrastructure gained as much as 21 percent after listing at 190 rupees, at a premium of 5.55 percent over the issue price of 180 rupees.
The stock was trading 14.3 percent higher at 205.80 rupees.
Bureau Report
First Published: Monday, January 11, 2010, 12:18