At 9.40 am IST, the Sensex was trading at 17,014 points, up 107 points. The Nifty was seen trading higher by 35 points at 5,156 points.

On Tuesday, markets ended on flat note after a lacklustre day. Investors remain skeptical on the EU Summit outcome and its ability to control Europe's debt turmoil.

However, US stock markets ended higher with the benchmarks rebounding from a two-week low after positive US housing market data signaled a recovery in the nation's housing market. US home prices fell at the slowest pace since November 2010 in April 2012.

On the sectoral front on BSE, all the sectors were trading positively except auto. Realty, Power, Bankex were leading the rally.

Among the shares that gained ground in morning trade were Tata Power, Reliance Infrastructure, IDFC and GAIL.

Stocks that failed to lure investors in early trade were Tata Motors, ONGC, Ambuja Cements and Bajaj Auto. Kingfisher Airlines dropped 4.85% on reports of lessors taking back 34 aircrafts of Kingfisher as it had failed to pay lease rentals.

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