The BSE Sensex nudged up 0.2 percent on Wednesday powered by metal producers on firm world metal prices, but trading was choppy reflecting investor concern about inflation and a looming rate rise.

Tata Steel rose 1 percent after the world's seventh-largest steel maker raised $112 million from anchor investors at the upper end of an indicated price range ahead of a

public share offering.

Financials mostly traded lower with the Reserve Bank expected to unveil a hawkish monetary policy next Tuesday, while export-focused outsourcers dropped after a run up this week.

Investors were also circumspect ahead of a cabinet reshuffle by Prime Minister Manmohan Singh, expected later on Wednesday.

There is lack of confidence in the market. Let us see how the cabinet reshuffle happens. Inflation issue continues to bother for now, said K.K. Mital, head of portfolio management services at Globe Capital.

By 10:49 a.m. (0519 GMT), the 30-share BSE index was trading up 0.15 percent at 19,120.75, with two-thirds of its components gaining.

Foreign funds have withdrawn around $710 million from Indian equities since the beginning of this month, pulling the index down by more than 6.5 percent.

Non-ferrous metal producer Sterlite Industries and aluminium producer Hindalco were up 1.7 percent and 1 percent respectively.

London copper prices rose close to their record high, lifted by positive U.S. earnings expectations and budding confidence in Europe's top economy Germany.

The IT sector index was down 0.6 percent after rising 4.4 percent over the previous two sessions. Tata Consultancy Services, Infosys and Wipro shed between 0.2 percent and 1.2 percent.

Top engineering and construction firm Larsen & Toubro dropped 1.6 percent, a day after Citigroup cut the stock to hold from buy citing a challenging macro

environment, poor inflows in the third quarter and order cancellations.

Top lender State Bank of India and private-sector lender HDFC Bank were down 0.8 percent and 0.6 percent respectively. Mortgage lender Housing Development Finance Corp eased 0.1 percent.

Bajaj Auto, the country's no. 2 motorcycle maker, was down 0.4 percent ahead of its quarterly earnings.

In the broader market, gainers were more than double the number of losers in a volume of 128 million shares.

The 50-share NSE index was up 0.2 percent at 5,735.35.

STOCKS ON THE MOVE

* State-run gas transporter GAIL India was down 1.9 percent at 468.85 rupees after its 12.7 percent rise in quarterly profit fell short of investors' expectations, two dealers said.

* Software services firm HCL Technologies was up 4.1 percent at 508.50 rupees after a better-than-expected 34.2 percent jump in consolidated quarterly net profit.

MAIN TOP THREE BY VOLUME ON BSE

* LIC Housing Finance on 3.5 million shares

* Ispat Industries on 2.6 million shares

* Hindustan Construction on 2.6 million shares

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