Sensex turns flat in choppy session...Breadth positive

The frontline Indian equity benchmarks are trading virtually unchanged in the afternoon trade in what has been a fairly choppy session so far. The Indian equity benchmarks continue to consolidate in a sideways fashion in the wake of January's strong upmove. The undertone is a little cautious amid lingering concerns about Greece's ability to avert the eurozone's maiden debt default. The sentiment in Asia was affected by China's higher-than-expected inflation in January, partly due to seasonal effects.

At 02:42 pm ( IST), the BSE Sensex was 17,721, up 13 points over the previous close. It had earlier touched a day’s high of 17,734 and a day’s low of 17,609. It opened at 17,647.

NSE Nifty was quoting 5,370, up 2 points over the previous close. It has earlier touched a day’s high of 5,378 and a day’s low of 5,338. It opened at 5,343.

Jindal Steel, Reliance Power, BPCL, Bajaj Auto, STER, SAIL, Tata Motors, Kotak Bank, J P Associat, Cairn, Reliance Comm, Siemens, Tata Power and PNB are among the leading gainers.

While, DLF, Bharti Airtel, IDFC, Sun Pharma, Reliance, ONGC, L&T, Grasim, Hindalco, ITC, HCL Tech, GAIL, HDFC, Tata Steel, TCS, Ranbaxy and Axis Bank are among the laggards on the BSE and NSE.

The market breadth is healthy though, as the broader indices have managed to outperform the Large-Cap indices today. The BSE Small-Cap index and the BSE Mid-Cap index are both up ~1% each.

Auto, Realty, Metals and CD indices are among the leaders, rising by more than 1% each. Power and Banking indices have gained nearly 1% apiece. The PSU index is up marginally as well. The Oil & Gas index is down close to 1%. Capital Goods, Pharma and FMCG indices are also in the red.

Although FII inflows have tapered off slightly of late they continue to be positive. Data on direct tax collection and bank credit is not encouraging, reflecting the tough macro-economic conditions. At the same time, it raises expectations of further policy easing by the RBI either in March or in April.

Hindalco shares have recovered after the company's Q3 earnings came in line with estimates. Investors earlier pummeled Hindalco shares after its subsidiary Novelis reported Q3 loss of US$12mn as against a net loss of US$46mn (year-on-year).

Shares of IT companies are subdued after NASSCOM predicted a slower growth in IT exports for FY13. Also, US-listed rival Cognizant Technology has announced strong results for the latest quarter and has projected a 23% growth in topline.

Shares of Tata Steel are down ahead of the company's Q3 FY12 earnings. Shares of Bharti Airtel and ONGC have also lost ground after their resuts failed to enthuse the investors. Index heavyweight RIL is also a loser today along with L&T.

On the other hand, auto majors like Tata Motors, Bajaj Auto and Hero MotoCorp. have managed dent gains.

An inside bar on Wednesday's trading session indicates indecisiveness at higher levels, with Nifty getting stuck in a range of 5300-5420. However, such sideways move in the past three trading sessions should be considered as consolidation after a big upmove. One should wait for a breakout above 5420 for initiating fresh long positions.

Asian markets were largely in the red as the Greek debt drama drags on amid lack of consensus among the various political parties and data showed faster-than-expected inflation in China. The Bank of Korea left borrowing costs steady today, as expected. Japan’s core machinery orders dropped 7.1% in December.

European markets rose marginally today, buoyed by banks and oil firms, while investors continued to follow developments in Greece.

Details over adjustment to pensions remained the sole sticking point in talks among Greek leaders even as most of the conditions set by international lenders for more aid were agreed upon.

Greek Prime Minister Lucas Papademos' office released a statement saying that the parties have reached an agreement "in principle." Representatives of the so-called troika reportedly met Papademos immediately after talks with the political leaders were adjourned.

A deal on fresh austerity measures is crucial for Greece to secure the second round of bailout funds from the so-called troika of EU, IMF and ECB.

Also watch out for the outcome of the European Central Bank (ECB) and the Bank of England policy meetings later today.