Sensex ends flat in volatile session; Modi ministers awaited

MUMBAI (Reuters) - The BSE Sensex ended flat on Monday in a volatile session, giving up earlier gains of nearly 2 percent due to profit-taking in blue-chips such as IDFC while caution ahead of Narendra Modi's ministerial appointments also weighed.

Selling pressure was broad-based as mid-cap shares saw steep falls. The NSE Midcap index ended down 2 percent, after earlier surging as much as 2.1 percent to hit a record high at 10,673.75.

Hopes of an economic revival by the incoming Modi-led government have helped maintain the BSE Sensex as the best performing equity index in Asia for 2014 with 23.4 percent returns compared to Pakistan's 22.1 percent and Indonesia's 21.7 percent.

Investors are awaiting the composition of Modi's cabinet, allocation of portfolios to the prime minister's office, and his choice for finance minister, widely expected to be front-runner Arun Jaitley.

"In the short term there would be some consolidation. Expansion of price-to-earnings has happened, now corporate profit growth is on watch," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

"The outlook is improving with Modi being there. I hope all important ministerial positions remain with the Bharatiya Janata Party," Srivastava added.

The benchmark BSE Sensex ended up 0.1 percent, or 23.53 points, at 24,716.88, after earlier rising as much as 1.95 percent.

The broader Nifty lost 0.1 percent, or 8.05 points, to end at 7,359.05, after rising as much as 1.9 percent during the day.

Among blue-chips, IDFC fell 4.7 percent while Tata Power Co ended 4.2 percent lower.

DLF fell 5.9 percent while Bharat Heavy Electricals lost 4.8 percent.

State Bank of India (SBI) fell 1.9 percent as investors pared positions after Friday's 9.6 percent jump.

Heavy outperformance since mid-March and investors' inclination for reducing perceived volatility in portfolios is leading to paring of positions in mid-cap stocks, dealers said.

Ramco Cements Ltd slumped 6.5 percent, Oriental Bank of Commerce declined 5.8 percent, while Jain Irrigation Systems lost 4.9 percent.

Divi's Laboratories Ltd slumped 4.1 percent, recording its biggest single-day fall since Sept 3, 2013, after the company's Jan-March net profit rose 6 percent to 1.9 billion rupees, lagging some analysts estimates.

However, among stocks that gained, Sun Pharmaceutical Industries Ltd rose 1.2 percent and Ranbaxy Laboratories Ltd ended up 0.4 percent after a court lifted a temporary stay it imposed on the on completion of the companies' $3.2 billion merger.

(Editing by Sunil Nair)