Stocks retracted sharply in early trade Tuesday after surging higher in the previous four consecutive sessions, as investors resorted to profit-taking, especially in banking shares ahead of the credit policy announcement in a short while from now.

The Indian markets ended on a steady note on Monday despite weak global cues as investors fretted about slower Chinese growth and waited for the outcome of the RBI’s rate-setting meeting. During the calender year, RBI has reduced the rate thrice by 0.75 percent.

Mumbai: A benchmark index of Indian equities markets, the 30-scrip Sensitive Index (Sensex), on Monday was trading 59.85 points or 0.21 percent up during the morning session.

Anand James, co-head, technical research desk, Geojit BNP Paribas, told IANS that the markets were also hopeful that the government will find a way to end the parliament logjam. “It is expected that the government may find a way out of the political logjam”, James told IANS.

“The all party meet which has been called today will be closely monitored. It has also put a question mark over the fate of key legislation like the GST (goods and services tax) and the land bill”.

U.S. stocks fell overnight, with energy stocks once again leading markets lower as the price of oil continued to fall to touch a six-month low.

Sector-wise, healthy buying was observed in banking, automobile and consumer durables stocks. However, metal, information technology (IT) and oil and gas scrips came under selling pressure.

The S and P BSE banking index zoomed by 313.53 points, the automobile index rocketed by 198.18 points and consumer durables index augmented by 176.13 points.

Major gainers were SBI (3.94 pc), ICICI bank (3.40 pc), Maruti (2.29 pc), Dr Reddy’s (2 pc), BHEL (1.58 pc), ITC (1.56 pc), Tata Motors (0.99 pc) and Sun Pharma (0.95 pc).

The losers: Vedanta, down 2.50 per cent at Rs 126.90; Mahindra and Mahindra, down 2.04 per cent at Rs 1,333.80, Coal India, down 1.96 per cent at Rs 430.70; Lupin, down 1.93 per cent at Rs 1,663; and HDFC Bank, down 1.49 per cent at Rs 1,094.60. In Asia, Japan’s Nikkei was trading lower 0.42 per cent while Hong Kong’s Hang Seng lost 0.31 per cent in morning trade today.

In Europe, the London FTSE 100 index inched down by 0.02%.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index up by 0.15%. On the flip side, KOSPI Index was up by 0.51% and Shanghai Composite was up by 1.34%.