The Sensex was trading higher by 3 points, while the Nifty gained 2 points at 9.30 am IST. Banking stocks were trading marginally higher ahead of the RBI policy and may exhibit volatility as the Monetary Policy unfolds by 11.00 am.
HDFC Bank, ICICI Bank, State Bank of India were amongst the gainers in early trade. Amongst the stocks that lost ground from the S&P CNX Nifty were Maruti Suzuki, Ambuja Cements, Siemens and ONGC.
Stocks that gained in early trade included Jaiprakash Associates, Dr Reddy's Laboratories, Mahindra and Mahindra and Bharti Airtel.
Firstsource Solutions gained marginally despite ICICI Bank cutting its stake in the company.
BHEL which dropped 6% on Monday following its results continued to drop lower and was down 1%.
SKS Microfinance dropped 5% following reports that a Rs 34 crores service tax notice was slapped on the company.
Meanwhile, markets in Asia were trading mixed with the Korean and Taiwanese markets trading higher, while the Japanese and Hong Kong markets declined.