The Sensex and Nifty ended flat as investors booked profits on recent outperformers, but defence stocks rose after the United States recognised the country as a “major defence partner” during Prime Minister Narendra Modi's ongoing US visit.

The 30-share BSE index Sensex rose 10.99 points or 0.04 per cent to 27,020.66 and the 50-share NSE index Nifty gained 6.6 points or 0.08 per cent to 8,273.05.

Among BSE sectoral indices, power index gained the most by 1.77 per cent, capital goods 1.76 per cent, infrastructure 0.96 per cent and PSU 0.61 per cent. On the other hand, IT index was down 0.61 per cent, TECk 0.47 per cent and healthcare 0.09 per cent.

Gainers, losers

Top five Sensex gainers were BHEL (+1.8%), L&T (+1.52%), ICICI Bank (+1.48%), Hero MotoCorp (+1.32%) and ONGC (+1.27%), while the major losers were Infosys (-1.5%), Asian Paints (-1.23%), HDFC Bank (-1.00%), Adani Ports (-0.95%) and TCS (-0.77%).

Bharti Airtel rose as much 2.6 per cent after a media report said that a new spectrum usage fee for all the airwaves owned by the company would lower costs.

Defence-sector stocks, including Bharat Electronics, Astra Micro Wave Products Ltd, Reliance Defence and Engineering Ltd and Walchandnagar Industries Ltd, jumped between 5.5 per cent and 17.3 per cent.

Some the recent outperformers fell, with Asian Paints down 1.23 per cent. The stock has gained 19.2 per cent since April-end as of Tuesday's close.

Kotak Mahindra Bank lost 1.5 per cent after rising 22.5 per cent since the end-February.

Shares have gained about 20 per cent since hitting a near two-year low on February 29 on hopes over the domestic economy and corporate earnings.

More gains ahead

Technical indicators point to more gains ahead, with the broader NSE index last month seeing its 50-day moving average cross above the 200-day average, creating a bullish trend called the “golden cross".

Analysts however warn markets will see periodic profit-taking, especially ahead of key events this month, including the US Federal Reserve policy meeting next week and Britain's June 23 referendum on whether to leave the European Union.

“There is constant churn in the portfolio which is resulting in a regular amount of profit booking as seen in the market," said Deven Choksey, managing director of KR Choksey Securities.

A report by SMC Global said: "Asian stocks were little changed, after the benchmark equity index rallied on Tuesday, as investors weighed data showing Japan's economy grew more than initially reported and investors awaited a report on Chinese trade. US stocks closed mixed Tuesday, with healthcare leading decliners and energy leading as oil settled above $50 a barrel for the first time since July.Japan had a current account surplus of 1.878 trillion yen in April. That was shy of expectations for 2.308 trillion yen following the 2.980 trillion yen surplus in March. The trade balance came in at 697.1 billion yen, missing forecasts for 919.0 billion yen following the 927.2 billion yen in the previous month. Exports were down 10.4 per cent on year to 5.603 trillion yen after shedding 11.4 per cent a month earlier. Imports tumbled an annual 23.1per cent to 4.905 trillion yen after dropping 5.404 trillion yen in March."

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