Key benchmark indices pared gains after hitting fresh intraday high in morning trade. The Nifty moved above 11,800 mark in morning trade. At 10:24 IST, the barometer index, the S&P BSE Sensex, was up 108.98 points or 0.28% at 39,543.92. The Nifty 50 index was up 27.40 points or 0.23% at 11,823.85.

Investors took caution ahead of the release of the full-blown union budget due next week and the upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping.

Broader markets outperformed the key index. The S&P BSE Mid-Cap index was up 0.49%. The S&P BSE Small-Cap index was up 0.39%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1074 shares rose and 662 shares fell. A total of 91 shares were unchanged.

DHFL slipped 2.25% to Rs 73.70 after defaulting on commercial papers repayment. The company announced that it has managed to meet 40% of its Rs 375-crore repayment commitment toward commercial papers. It further stated that it is already in the process of selling down its loan assets including wholesale project loans to make good all its obligations and maintain its 100% commitment to all its creditors. The remaining Rs 225 crore will be paid once the surplus cash flow position of the company improves over the next couple of days.

The S&P BSE Bankex was up 151.58 points or 0.44% at 34,851.91.

Private sector bank stocks advanced. RBL Bank (up 1.31%), ICICI Bank (up 1.19%), Axis Bank (up 0.89%), Yes Bank (up 0.36%), Kotak Mahindra Bank (up 0.26%) and HDFC Bank (up 0.24%) edged higher. IndusInd Bank was down 0.44%.

Most PSU banks stocks rose. Syndicate Bank (up 2.07%), Allahabad Bank (up 1.06%), and Bank of India (up 0.17%), State Bank of India (up 0.14%), Union Bank of India (up 0.13%) and Punjab National Bank (up 0.06%) edged higher. Jammu and Kashmir Bank (down 1.5%), Oriental Bank of Commerce (down 0.53%) and Bank of Baroda (down 0.17%) edged lower.

Shares of most public sector oil marketing companies (PSU OMCs) dipped as Brent crude oil price increased. Bharat Petroleum Corporation (down 1.5%), Hindustan Petroleum Corporation (down 1.30%) and Indian Oil Corporation (down 0.62%) declined.

Higher crude oil prices could increase under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

In the commodities market, Brent crude for August 2019 settlement was up 105 cents at $66.10 a barrel. The contract rose 19 cents or 0.29% to settle at $65.05 a barrel in the previous trading session.