The equity market erased gains on Friday after starting higher, tracking largely positive Asian cues. Auto and financials surged on value-buying and in anticipation of better corporate earnings in the third quarter beginning from next week. Investor sentiment improved slightly on optimism of US-China trade talks amid slowdown concerns impacting both the top two economies of the world.

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At 9.45 am, the Sensex trimmed gains to trade higher by just 25 points, or 0.07 percent, at 35,539. The Nifty was up by 12 points, or 0.11 percent, to trade at 10,684. Earlier, the Sensex surged more than 115 points, or 0.32 percent, to trade at 35,628.80, while the Nifty gained over 35 points, or 0.33 percent, to 10,707.90.

Broader markets slightly outperformed with the Nifty MidCap gaining 81 points, or 0.46 percent, to 17,611. But, the Nifty Bank slightly underperformed, trading higher by 0.28 percent.

BSE Telecom was leading the 40 advancing sectors, with BSE Auto and BSE Metal among other notable gainers. The telecom gauge moved 1.5 percent higher. BSE Energy fell the most among the three declining sectors, which included BSE IT as well.

Among gainers, Tata Motors surged 2.6 percent in early trade after Jaguar Land Rover sales in the US surged 24 percent in December. Bharti Infratel, Indiabulls Housing Finance, Eicher Motors and Hindalco rose between 1.34 percent and 1.88 percent.

ICICI Bank, HCL Technologies, Tata Consultancy Services, Tech Mahindra and HPCL declined by up to 0.63 percent.

Meanwhile, Indian rupee gained 27 paise a dollar

in the opening session on Friday, starting at 69.97. The home currency had slipped for the second straight session on Thursday, losing 2 paise to close at 70.20.

Asian markets were largely higher with the exception of Japan's Nikkei which likely priced in the recent global equity sell-off, falling by 2.62 percent. The Japanese markets opened after a long New Year holiday.

Hong Kong's Hang Seng surged 1.39 percent, while South Korea's Kospi flirted around half a percent mark.

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