BSE Sensex and Nifty gave up their gains after surging in early trade, boosted by the passage of the insurance Bill and better-than-expected industrial output data.
At 10:14 a.m., the Sensex and Nifty were down 0.30 per cent. At its day's high Sensex rose over 250 points to 29,183 while Nifty hit 8849.
TS Harihar, Chief Executive and Founder of HRBV Client Solutions Private, said speculations of an earlier-than-expected rate hike from US Federal Reserve are weighing on the markets. Unless the Fed clarifies its stance on rate hikes, Nifty could not see a meaningful breakout on the upside, he added.
The Fed's next meet is scheduled for March 17-18.
Shares in insurance companies had surged on Friday after Parliament passed a bill proposing to increase overseas investment limit in the sector. But they also pared their gains. In recent trade,
Max India, Reliance Capital and Bajaj Finserv were up 1-3 per cent. Lawmakers in the Rajya Sabha agreed to increase the foreign investment limit in insurers firms to 49 percent from 26 percent after the opposition Congress party supported the bill that was cleared by the Lok Sabha last week.
Data released after market hours showed that factory output grew a better-than-expected 2.6 per cent in January.
Among Nifty stocks, banking stocks were in limelight with experts saying that some of the lenders could sell stake in their insurance units.
ICICI Bank and HDFC were up nearly 2 per cent while SBI rose nearly 0.7 per cent.
Selling pressure was seen in metal and IT stocks. Hindalco and JSPL were down 1-2 per cent while HCL Tech, Wipro and Tech Mahindra fell nearly 1 per cent.
Profit-taking was also seen in pharma stocks with Sun Pharma falling 1.5 per cent.
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