Bouncing back towards the fag-end of the session in an otherwise choppy trade, the benchmark BSE Sensex today closed nearly 5 points higher at 27,990.21 with gains in IT, PSU and banking stocks, tracking a higher opening in the European markets.
However, a mixed trend on Asian bourses amid investors awaiting cues on whether the Federal Reserve would raise US interest rates this year kept investors edgy.
Besides, a cautious approach by participants ahead of the August-month expiry in the derivatives segment on Thursday too influenced the domestic trading sentiment.
Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services Ltd, said, "Market remains range-bound with a positive bias due to a slight recovery in European markets. On the other hand, global market is shifting its focus to the possibility of a rate hike in the US by December 2016, which will cast a shadow on the domestic market."
He further said, "The domestic market is losing its trend to rate sensitive stocks post the announcement of the new RBI governor who is likely to maintain a cautious stance on interest rate cut."
The 30-share Sensex after a higher opening at 28,012.56, quickly slipped into the negative zone as profit-booking emerged and touched a low of 27,854.43.
However, on emergence of buying in the last half-an-hour of trading, it bounced back to wipe out early losses and settled 4.67 points, or 0.02 per cent, higher at 27,990.21.
The gauge had lost nearly 138 points in the previous two sessions.
Also, the NSE Nifty ended 3.45 points, or 0.04 per cent, higher at 8,632.60 after moving in a range of 8,642.15 to 8,580.00.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 300.50 crore yesterday, as per provisional data.
In the domestic market, 20 stocks in the 30-share Sensex
pack ended higher, while the remaining 10 closed lower.
Short-covering of positions -- speculators buying stocks that have been sold short to steer clear of losses -- in view of tomorrow's November monthly derivatives contract expiry added to the upward move.
The BSE Mid-Cap and Small-cap indices rose by 1.22 per cent and 1.54 per cent, respectively.
Lupin was the top gainer from the Sensex pack, rising by 5.22 per cent, followed by Asian Paints (3.87 per cent), Tata Steel (3.80 per cent), NTPC (2.63 per cent), L&T (2.16 per cent), Axis Bank (1.94 per cent), Sun Pharma (1.64 per cent), Tata Motors (1.40 per cent), HUL (1.31 per cent), Adani Ports (1.15 per cent) and TCS (1.05 per cent).
However, M&M fell by 2.02 per cent, HDFC 1.72 per cent, Bharti Airtel 1.22 per cent, Power Grid 1.22 per cent and HDFC Bank 1.04 per cent.
Among the S&P BSE sectoral indices, realty rose 3.41 per cent, followed by metal (2.32 per cent), healthcare (2.19 per cent), capital goods (1.30 per cent), consumer durables (1.26 per cent), utilities (1.19 per cent) and industrials (1.17 per cent).
Market breadth remained positive as 1,922 stocks ended higher, 665 finished in red while 165 ruled steady.
The total turnover on BSE rose to Rs 2,499.34 crore from Rs 2,306.61 crore yesterday.
