The Sensex and the Nifty were trading flat a day ahead of the crucial Reserve Bank of India credit policy meet which have raised expectations of an interest rate cut.
The Sensex was trading with gains of 8 points, while the Nifty was up 4 points in trade. Banking stocks were flat with a slightly negative bias and may take cues from the RBI policy.
Software stocks continued to see buying interest with Tata Consultancy Services, Wipro and Infosys among the early gainers. Sun Pharma also joined gainers along with ITC.
Oil marketing stocks were in demand with crude oil continuing to see severe selling pressure in the international markets. Both BPCL and HPCL were higher in early morning trades.
Other Mid Cap Stocks that rallied in trade were Havells India, Tata Global Beverages and Oriental Bank of Commerce.
Shares in PVR rallied after reports that the company was in talks to buy Chennai based SPI Cinemas. The stock was trading with gains of 2 per cent.
Meanwhile, markets in Asia were trading mixed with the Shanghai Composite gaining ground, while the Japanese Nikkei was trading with losses.