Equities were choppy on Monday, erasing early gains of more than 1 per cent, as uncertainties ahead of national election results on May 16 tempered rising optimism about the global economy.
Leading financials State Bank of India, which posted 46 per cent jump in quarterly profit on Saturday, and smaller rivals ICICI Bank, HDFC Bank were among the major gainers.
By 11 a.m., the 30-share BSE index was up 0.05 per cent at 11,882.96 points, after turning briefly negative, with energy giant Reliance Industries that has the heaviest weight in the index edging up 0.04 per cent.
The benchmark, which is up about 50 per cent from its 2009 low in early March, rose as much as 1.3 per cent in early deals, but fell back as investors were concerned about the poll results throwing up a unstable coalition.
Thirteen of the index components rose, while in the broader section gainers led losers 1,007 to 912 on relatively moderate volume of 117 million shares.
Analysts said despite the widespread caution till the political outlook becomes clearer, some investors who had missed a nine-week rally were trying to make amends by building long positions.
"Those who are looking at the market from a medium to longer term perspective will be looking to enter the market now as they may have been left out earlier," Gajendra Nagpal, chief executive of Unicon Financial Intermediaries in New Delhi, said.
"At the same time, some will be taking profits on the recent rally as the in the near term, the market is a bit overstretched," he said.
Traders said investor sentiment was also helped by a rise in US stocks on Friday as bank stress test results and reassuring US jobs data fuelled hopes the worst was over for banks and the economy.
Private-sector lender ICICI Bank rose 3.4 per cent to Rs 538.35, while rival HDFC Bank advanced 1.1 per cent to Rs 1,156. Government-run State Bank of India, the country's largest lender, gained 0.9 per cent to Rs 1,337.
The 50-share NSE index was down 0.4 per cent at 3,606.60.
Asian shares rose on Monday, with Japan's Nikkei up 0.01 per cent, while MSCI's measure of other Asian market rose 0.9 per cent.
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