Benchmark indices recouped intra-day losses and ended flat helped by a recovery in financials in late trades. Absence of strong directional cues and weakness in global equity markets dampened sentiment.
The 30-share Sensex and the 50-share Nifty ended flat at the mark of 27,403 and 8,248 respectively.
In the broader market, both the BSE Midcap and Smallcap indices performed better than the front-liners with gains of around 0.5% and 0.1% each. Market breadth in BSE ended slightly positive with 1,439 advances against 1,420 declines.
Indices rose in early trade on renewed thrust given to the reform agenda by the government. On Monday the Cabinet recommended promulgation of an ordinance to amend the Land acquisition Act, making PPP project more attractive for investors by removing the need for social impact assessments and consent from 70% of the land owners for PPP projects in the infrastructure and social infrastructure sectors.
The Cabinet also approved an ordinance to amend various provisions in the law on arbitration to make India the preferred venue of arbitration. Many foreign companies in a dispute with the government like Vodafone have preferred to go outside India for arbitration.
Meanwhile, foreign institutional investors were net sellers in Indian equities worth Rs 204.22 crore on Monday, as per provisional stock exchange data.
BSE Consumer Durables and Capital Goods indices, up around 1.4% and 1.1% each, were the lead gainers among sectoral indices followed by BSE Power index, up 1.1% and BSE Bankex, up 0.7%. BSE Oil & Gas index, down 1.2% lost the most followed by BSE Metal index which ended down 1%.
Fresh buying was visible in financials during the last hour of trading. Mortgage lender HDFC ended around 1% higher. On Monday, a meeting of the Board of Directors of HDFC was held to consider and approve the un-audited financial results of the Corporation and the un-audited consolidated financial results, for the quarter / nine months ending December 31, 2014.
Axis Bank gained over 1%. According to media reports, the private bank sector is looking for a partnership to launch a payment bank as per the final guidelines of RBI.
ICICI Bank, HDFC Bank and SBI gained around 0.4% to 0.7% each.
BHEL gained around 2%. BHEL has joined hands with Hidustan Shipyards Limited and Mishra Dhatu Nigam Limited to form a consortium for building submarines indigenously. The consortium will bid for the P-75 (I) project of Indian Navy for building six submarines at an Indian shipyard.
Oil shares ended mixed after being under pressure through the session as global crude prices declined further and analysts predicted further bearishness in the market owing to rising US production despite a global supply glut.
ONGC and RIL lost around 1.5% and 1.7% each while GAIL gained around 0.5% after erasing losses in late trade.
Metal shares which had gained on Monday on hopes of ordinance for mines sector reforms witnessed profit taking. Sesa Sterlite ended down 1.2%, and Hindalco lost 0.4%.
Tata Steel lost around 2%. Tata Steel has announced that the mining restrictions the company faced in Jharhkand are likely to adversely impact its third quarter revenues as the company was compelled to suspend operations at one of its blast furnaces in Jamshedpur for more than a month resulting in below capacity operation during the period.
Among infra stocks, NCC, NBCC and IRB Infra ended with gains of 3% to 5% each on Cabinet approving ordinance for amendments in the Land Acquisition Act.
Jindal Stainless ended around 3% higher after the company said on Monday that it would de-merge its ferro-alloys, coke oven and stainless steel businesses into three different entities via the slump sale route in a bid to reduce its mounting debt and to ensure better management of its business verticals.
Nikkei ended lower by 1.6% as investors closed positions beofre the extended New Year holidays. Worries over political uncertainty in Greece also weighed on the sentiments. Hong Kong shares too finished lower on Tuesday as growing uncertainties at home and abroad dampened investor sentiment. Hang Seng index ended 1.1% lower while Shanghai Composite index ended flat.
European markets have opened on a weak note dragged by the losses in energy shares as as Brent oil fell to a fresh 5-1/2-year low on persistent worries about a global supply glut. FTSE 100, CAC 40 and DAX indices have lost around 0.7% each.