Asian share markets inched higher but were capped on Tuesday with the dollar vulnerable after unexpectedly weak U.S. factory data raised investor caution ahead of new indicators that could flag falling economic momentum.

Benchmark indices were sluggish in early trade Tuesday, with investors not seeing any clear triggers either ways. Auto shares were under pressure following weak sales numbers for March, while pharma and capital goods shares were steady. The Sensex was at 18875, up 11 points and the Nifty at 5702, down 2 points.

Mahindra & Mahindra was an exception to the bearish trend in the auto space, with the stock slightly up over its previous close. M&M reported a 7 percent rise in March sales. Brokerage house JP Morgan has retained its ‘overweight’ rating on the stock, while cautioning on risks from “a sharper-than-expected increase in competition in the SUV segment; a delayed recovery in tractor segment sales; any delays in a turnaround at its two-wheeler and CV subsidiaries.”

Laggards in the Sensex included Tata Motors, Bajaj Auto, Idea Cellular and United Spirits, down 1-2 percent. Select midcap and small cap shares were in demand, but brokers said the outlook on the broader market remained wary. “There will not be much cheer for the next six months in terms of corporate earnings; the focus will be on incremental government announcements on reforms,” said Sandeep Bhatia of Kotak Securities, in an interview to CNBC-TV18.

LOCAL MARKETS PREVIOUS CLOSE
* BSE index 18,864.75 (+0.15 pct)
* NSE index 5,704.40 (+0.38 pct)
* Rupee 54.28/29 per dollar (54.365/375)
* 10-year bond yield 7.95 pct (7.99 pct)
* 5-year OIS rate 7.22 pct (7.24 pct)
* 1-year OIS rate 7.47 pct (7.51 pct)
* Call money 16/17 pct Thurs close (7.75/7.85 pct)