Sensex turns flat after regaining 21,000, banking stocks fall

The Senses turned flat after regaining the 21,000 level on profit-taking at higher levels.

The Sensex was down 5 points at 20,953.39 while Nifty was almost unchanged at 6,243. The Sensex had hit 21,049 at its day's high.

Market analyst Rajat Bose said profit-taking after yesterday's sharp gains put some pressure on the Sensex.

Rakesh Arora, MD & Head of Research of Macquarie Capital Securities (India), said state election results which are due on Sunday are crucial for the current rally to continue. The Sensex had gained 1.2 per cent yesterday after exit polls predicted a BJP win in four states.

The improving fundamentals of the Indian economy are helping the "re-rating of Indian markets", Mr Arora said, adding that the markets could test new highs next year.

Banking stocks were under some pressure on profit-taking after yesterday's sharp gains. The Bank Nifty was off 0.3 per cent after rising nearly 4.5 per cent on Thursday.

Asian shares also steady, with caution prevailing ahead of U.S. monthly jobs data on Friday which will help set expectations about the timing of any potential tapering of the Federal Reserve's stimulus program.

Power Grid Corp of India shares rose 1.8 per cent after stronger-than-expected demand for its $1.1 billion share sale.

Two-wheeler stocks gain on optimism about their earnings outlook: Hero MotoCorp was up 2.4 percent, Bajaj Auto gained 0.2 percent. (With Reuters inputs)