Sensex, Nifty rebound; Reliance, TCS, ITC, HUL gain strength

Moneycontrol Bureau12:59 pm Market recovers: Equity benchmarks rebounded with the Sensex rising 34.15 points to 24888.26 and the Nifty up 5.10 points to 7567.50 led by short covering.Infosys jumped 6.5 percent followed by Lupin (up 2 percent) and Reliance Industries (up 0.15 percent).The market breadth also turned better compared to morning. About two shares declined for every share advancing on the Bombay Stock Exchange, which was 1:10 (advance:decline) in morning.12:50 pm Buzzing: Shares of Tata Steel slumped over 3 percent after the global rating agency S&P downgraded the company on weak operating performance. Standard & Poor's (S&P) yesterday downgraded steel major Tata Steel to 'BB-', a low investment grade rating, over persistent subdued operating performance amid subdued demand and low steel prices.

12:40 pm RCom-Sistem deal: Reliance Communications (RCom) said stock exchanges BSE and NSE gave their go-ahead to its deal to acquire Russian conglomerate Sistema's Indian telecom unit, Sistema Shyam Teleservices Ltd (SSTL). "We wish to inform you that we have received observation letter from BSE Ltd and National Stock Exchange of India Ltd (NSE)," Reliance Communications said in a BSE filing.It further said, "The company and SSTL are proceeding to file necessary application with the Bombay High Court and Rajasthan High Court respectively for approval of the scheme." In November, India's fourth-largest telecom operator RCom announced acquisition of Sistema's Indian telecom unit in an all-stock deal that will create an operator with 118 million subscribers.12:20 pm Market Expert: One of the earliest analysts to turn cautious on equity markets, Saurabh Mukherjea, CEO - Institutional Equities at Ambit Capital, is still sticking out his neck and forecasting Sensex to grind lower to 22,000 -- a call that attracted some criticism when it was made last year.

"Sensex 22,000 is where we become constructive on India again," Mukherjea told CNBC-TV18 in an interview, adding that he expects GDP growth to slow in the third quarter, bogged down by slowing bank credit.Also read - Infosys Q3 surprises, ups FY16 $ revenue guidance, net rises 2%

12:00 pm Market Check

The market trimmed losses in noon trade following short covering. The 30-share BSE Sensex fell 105.76 points to 24748.35 and the 50-share NSE Nifty declined 37.60 points to 7524.80.

The broader markets slipped 0.8 percent. The market breadth remained weak, though it turned better compared to opening. About three shares declined for every share advancing on the Bombay Stock Exchange.

WPI inflation for December stood at negative 0.73 percent compared to negative 1.9 percent in preceding month.

Infosys continued to support the market, trading with high volumes post strong numbers in third quarter. The stock surged 4.7 percent as quarterly profit increased 2 percent and full year dollar revenue guidance increased to 12.8-13.2 percent in constant currency from 10-12 percent earlier.

Among others, Lupin and Dr Reddy's Labs gained 1 percent each.