Indian shares ended flat after a volatile trading session on Friday as investors opted to trade cautiously ahead of December inflation data scheduled next week which is likely to decide the stance of Reserve Bank of India's monetary policy on January 29.
Trading was volatile with software companies leading gains after upbeat Infosys' third quarter results, however, gains were capped on growth recovery concerns in Asia's third-biggest economy after weaker-than-expected November industrial output.
The 30-share Sensex of the Bombay Stock Exchange inched up 0.09 point and ended at 19,663.64 while the 50-share Nifty fell 17.35 points at 5,951.30.
India's index of industrial production (IIP), measuring output at factories, mines and utilities, contracted by 0.1% in November following a revised 8.3% rise in October.
Rupa Rege Nitsure, chief economist, Bank of Baroda commented on November IIP which was in-line with her estimates. She expects RBI to cut interest rates by atleast 25 basis points on Jan 29 and sees modest recovery in industrial production from hereon.
Despite growth headwinds, significant buying was witnessed in BSE-IT index that surged over 10% today. Infosys, the bellwether stock of Information Technology index, posted its best gains in nearly a decade after better-than-expected third quarter performance.
Asian markets ended mixed as China’s inflation accelerated and Japan approved 10.3 trillion yen ($116 billion) of stimulus measures.
Hong Kong's Hang Seng fell 0.4% to 23,264, Taiwan's Weighted index rosel 0.1% to 7,819, Singapore's Straits Times was down 0.4% to 3,213 . Also China's Shanghai Composite declined 1.8% to 2,243 while Japan's Nikkei rose 1.4% to 10,801.
Back home, barring IT, technology, consumer durables indexes, all sectoral indices dropped with FMCG,PSU, power, real-estate, banks, capital goods sectors leading declines on BSE.
Among key Sensex stocks, ONGC dropped 3.3%, ITC and HUL were down over 2.5% and 3.5%, Bharti Airtel declined 1.6% , BHEL declined 2%, among banks, SBI and ICICI Bank dropped 2% and 1.5% each while Reliance Industries fell 1.2% on BSE.
Among gainers, Infosys gained 16%, Wipro and TCS rose 4-6% while Sterlite Industries ended up 1% on BSE.
Shares of information technology (IT) companies are in focus after Infosys reported a better-than-expected net profit for the third quarter ended December 2012 (Q3) and upped its full year guidance.
The other key notable movers are, Scooters India locked in lower circuit of 5% and ended at Rs 39.25 on reports that the government deferred the revival plan of the company.
Parkeh Aluminex tanked 10% to Rs 183, locked in maximum lower permissible limit for second day in a row after the company said Mr Amitabh Parekh, the founder chairman and managing director of the company expired on January 06, 2013.
The broader markets declined with mid-caps and small-caps falling 1.6% each on BSE.
The market breadth was negative. Out of 3,078 stocks traded, 1,963 stocks declined compared to 985 advanced on BSE.