The key benchmark indices pared gains in afternoon trade as index heavyweight Reliance Industries (RIL) trimmed gains in volatile trade. Two other index heavyweights -- Larsen & Toubro and ICICI Bank, edged lower. Asian stocks were mixed. The BSE 30-share Sensex was up 34.70 points or 0.19%, off close to 90 points from the day's high and up close to 45 points from the day's low. The index fell below the psychological 18,000 mark in early trade to regain that level shortly. The 50-unit S&P Nifty index was a tad above the 5,400 mark after sliding below that level in opening trade. The market breadth was negative, in contrast with strong breadth earlier in the day.

The BSE Mid-Cap and Small-Cap indices were in the red, underperforming the Sensex. Realty, FMCG and some metal stocks gained. Cipla slumped close to 3% after poor Q3 earnings.

A bout of volatility was witnessed in opening trade as the key benchmark indices slipped into the red after a firm start. The market bounced back into the green instantly, with the Sensex hitting a fresh intraday high. The market pared gains in morning trade. The Sensex regained strength amid volatility in mid-morning trade. The market held positive in early afternoon trade. The market pared gains in afternoon trade.

The GDP growth in the first half of the current fiscal year to end-March is expected to be revised downwards from 8.9% provisional estimate, Chief Statistician of India T.C.A. Anant said on Monday. Anant also said the government will release a new monthly CPI data series from 18 February 2011.

The government today, 7 February 2011, estimated GDP growth for the fiscal year ending March 2011 at 8.6%. Farm output is expected to grow 5.4%, while industry growth this fiscal is expected at 6.2%. The service sector growth is projected to grow 11%.

Finance Minister Pranab Mukherjee on Sunday, 6 February 2011, said inflation and the current account deficit might become causes of concern if crude oil prices keep rising.

Oil traded near the lowest in a week as receding violence in Egypt eased concern that supplies of crude from the Middle East will be disrupted. New York March 2011 crude futures fell below $89 a barrel level after Egyptian Vice President Omar Suleiman and some members of the opposition agreed on Sunday, 6 February 2011, on limited steps to resolve the crisis. US President Barack Obama said Sunday he is confident the US can work with Egypt's next government, though he stopped short of calling for President Hosni Mubarak's immediate departure, which protesters in Egypt are demanding.

Foreign institutional investors (FIIs) bought shares worth a net Rs 144.04 crore and domestic institutional investors bought shares worth Rs 237.45 crore on Friday, 4 February 2011, as per provisional data from the stock exchanges.

On the corporate front, the results announced so far showed that the combined net profit of a total of 1,877 companies rose 22.4% to Rs 75981 crore on 20.50% rise in sales to Rs 633330 crore in Q3 December 2010 over Q3 December 2009.

There are concerns of slowdown in corporate profit growth going ahead. With the rise in key policy rates by the Reserve Bank of India (RBI) recently, interest cost will only rise in the coming quarters that could hurt earnings going forward. If raw material costs keep rising at a fast clip, companies will feel the heat of slowing sales growth and rising cost of operations that could start eating into profit growth.

The next major trigger for the stock market is Union Budget 2011-2012 to be unveiled by the finance minister Pranab Mukherjee on 28 February 2011. Investors will watch if the Finance Minister announces measures to rein in inflation and inflationary expectations. The Finance Minister may announce a new road map for the Goods & Services Tax (GST). The original deadline of 1 April 2010 for roll-out of GST has already been missed due to the lack of consensus between the Centre and states on the issue. GST is India's most ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states.

The Centre has reportedly sent the empowered committee of state finance ministers yet another draft constitutional amendment on the proposed goods & services tax (GST) in a last-ditch attempt to reach a consensus before the Budget session of Parliament. The third draft reportedly proposes the creation of a GST Council through an Act of Parliament, instead of presidential order, as proposed in the previous draft. The empowered committee will convene in New Delhi on 11 February 2011 to discuss the revised draft.

The government may also announce some populist measures in the Budget given that assembly elections are due in Kerala, Tamil Nadu, West Bengal and Assam. In all these states, the Congress is potentially looking to regain power or to retain it.

Meanwhile, Finance Minister Mukherjee has reportedly convened a meeting of leaders of political parties on 8 February 2011 to resolve the deadlock in Parliament on the issue of Joint Parliamentary Committee (JPC) probe into the 2G spectrum scam. Lok Sabha Speaker Meira Kumar has convened a meeting of leaders of some of the political parties on Monday, 7 February 2011, to ensure smooth functioning of the budget session after the longest shutdown of Parliament in the winter session on the JPC issue.

Asian stocks were mixed on Monday, 7 February 2011. The key benchmark indices in South Korea and Japan rose between 0.46% and 0.47%. The key benchmark indices in Indonesia, Hong Kong and Singapore fell by between 0.08% to 1.17%. Markets in China, Taiwan and Vietnam remained shut on account of last week's Lunar New Year.

US stocks rose on Friday, 4 February 2011, reversing losses and sending the Standard and Poor's 500 Index to the highest level since June 2008, after unemployment rate unexpectedly dropped and more companies beat earnings estimates. The Dow Jones industrial average rose 29.89 points, or 0.25%, at 12,092.15. The S&P 500 index added 3.77 points, or 0.29%, at 1,310.87 and the Nasdaq Composite index climbed 15.42 points, or 0.56%, at 2,769.30.

The Labor Department said on Friday, 4 February 2011, the US unemployment rate fell to 9% in January 2011 from 9.4% in December 2010.

US index futures reversed early losses. Trading in US index futures indicated that the Dow could rise 5 points at the opening bell on Monday, 7 February 2011.

Back home, on the macro front, there are concerns that high inflation will trigger more monetary tightening from the Reserve Bank of India this year. Prime Minister Manmohan Singh on Friday, 4 February 2011, said the country's high inflation posed a "serious threat" to the growth momentum, and was driven by supply-side shortages.

Reserve Bank of India (RBI) deputy governor Subir Gokarn on Sunday, 6 February 2011, said events in Egypt will have an impact on monetary policy. "After making the policy announcement on 25th Jan, a whole set of events unfolded in the Middle East, which are starting to have an impact on oil prices, obviously, which we did not anticipate at the time we made the announcement," Gokarn said. "So, a completely new environment has emerged in a very short time after the announcement. It is going to have an impact on our thinking, our action going forward," Gokarn added.

At 13:20 IST, the BSE 30-share Sensex was up 34.70 points or 0.19% to 18,042.85. The index gained 126.87 points at the day's high of 18,135.02 in early trade. The index fell 12.70 points at the day's low of 17,995.45 in early trade.

The S&P CNX Nifty was up 6.28 points or 0.11% to 5,401.95. The Nifty hit a high of 5,431.50 and low of 5,385.10 in intra-day trade.

The BSE Mid-Cap index fell 0.27% and the BSE Small-Cap index shed 0.68%.

The market breadth, indicating the health of the market, was negative. On BSE, 1511 shares declined while 1176 shares advanced. A total of 92 shares remained unchanged. The breadth was strong upto mid-morning trade.

Among the 30-member Sensex pack, 20 gained while the rest fell. Wipro, TCS and Tata Motors fell by between 1.61% to 2.35%. Hero Honda Motors, Jaiprakash Associates and HDFC Bank rose by between 1.62% to 3.13%.

Index heavyweight Reliance Industries (RIL) rose 0.33% to Rs 922.25 after oscillating between Rs 914.40 and Rs 929 so far during the day. As per recent reports, RIL may challenge Chevron Corp's bid for Atlas Energy Inc. RIL is said to have hired Perella Weinberg Partners and Kirkland & Ellis to evaluate its options. Last April, Reliance agreed to pay Atlas $1.7 billion to form a joint venture and own 40% of Atlas's Marcellus Shale operations in the eastern United States. In November 2010, Chevron then announced plans to buy Atlas for $3.2 billion.

In other index heavyweights -- Larsen & Toubro and ICICI Bank shed by between 1.35%. and 1.04%, respectively.

BPCL rose 2.09% after company announced natural gas discovery off the Mozambique offshore. The company made this announcement during market hours today.

Cipla lost 2.84% after net profit 19.49% to Rs 232.69 crore on 11.70% rise in net sales to Rs 1501.36 crore in Q3 December 2010 over Q3 December 2009. It was the top loser from the Sensex pack.

India's largest FMCG company by sales Hindustan Unilever rose 1.27% on reports the company will soon launch its first fruit-based drink under the Kissan brand to cash in on the increasingly health-conscious mindset of the Indian consumer.

Among other FMCG stocks, ITC, Nestle India, Tata Global Beverages, Colgate Palmolive (India) and Dabur India rose by between 0.11% to 3.04%.

Realty stocks edged higher on bargain hunting after recent steep losses. Indiabulls Real Estate, Unitech, DLF and HDIL rose by between 1.2% to 4.06%.

Some metal stocks rose as LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.16% on Friday, 4 February 2011. National Aluminum Company, Jindal Steel & Power, JSW Steel, Sterlite Industries and Tata Steel gained by between 0.06% to 0.72%.