Indian markets pared most of its earlier gains on Tuesday and is trading on a flat note. Auto, IT and power stocks gained the most while banking and financials dropped.

BSE Midcap and Smallcap index rose 0.93% and 1.03% respectively.

At 12.58 p.m., the Sensex was trading up 102.79 points or 0.21% at 49,952.63.   Meanwhile, the Nifty was trading higher by 54.25 points or 0.37% at 14,815.80 with 31 components gaining.

Biggest gainers in the 30-share index were Mahindra & Mahindra  (4.56%), Tech Mahindra  (2.60%), NTPC  (2.40%), Tata Consultancy Services  (1.91%),  and Bajaj Auto  (1.89%).

On the other hand, Oil & Natural Gas Corporation  (2.73%), Housing Development Finance Corporation  (1.89%), Power Grid Corporation Of India  (1.03%), ICICI Bank (0.73%), State Bank Of India (0.61%),  and Kotak Mahindra Bank  (0.61%) were the biggest losers in the Sensex.

Market breadth was negative with 1,629 advances against 1,209 declines.

Commenting on the outlook, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "Technically, Nifty formed a small Bullish candle but an inside Bar on daily scale which indicates an absence of direction. Now, it has to continue to hold above 14700 to extend its move towards 14900-15000 while on the downside immediate support exists at 14,600-14,500 levels. India VIX fell down by 8.94% from 28.14 to 25.62. Cool down in VIX from highs could give some stability to the market but it needs to hold below 22 zones in coming sessions.

Going ahead the market may continue to be volatile and would look at global cues for market direction. Investors would closely track bond yields, inflation data and Covid situation along with developments around US stimulus. Investors should adopt to buy on dips strategy while traders should trade cautiously with stock specific action and book profits in regular intervals."