The key benchmark indices cut losses in afternoon trade today amid gains in FMCG, metal and banking stocks. Asian stock markets were mostly up after the US services industry showed its first growth in a year.

The Sensex was trading at 16,836, down 29 points. The Nifty dropped 17 points to trade at 4,986.

Some consolidation in the markets ahead of the earnings would be good. The markets can head higher only on the back of good corporate results, said Neeraj Dewan, director of Quantum Securities.

On the sectoral front, the BSE metal index rose 1.5 per cent and the BSE bankex gained gained 0.4 per cent. FMCG stocks were also trading higher today.

Telecom stocks, however, continued to remain under pressure on fears about the sectors profitability, with Idea, RCom and Bharti plunging over 10 per cent. Reliance Communications on Monday had cut tariffs to a flat 50 paise per minute. Indian telecom operators may soon be asked to compulsorily give their customers the option of paying tariff based on usage per second instead of the current per minute pulse, sector regulator TRAI said on Monday.

Among the Sensex stocks, HUL surged 5 per cent and Hindalco advanced 4.9 per cent. ITC also rose 3 per cent.