After a lower start, the Sensex traded in a narrow 100-point range and closed 21.20 points, or 0.12 per cent higher at 17,257.38. The BSE benchmark index had gained nearly 600 points in last three days on hopes of rate cut by RBI.
Pharma, capital goods, realty and power sectors attracted good buying interest today while some of the metal, refinery and IT stocks ended with losses.
Brokers said investors in Indian shares remained cautious in line with Asian markets that ended mixed as participants wait for the results of the US Federal Reserve's two-day monetary policy meeting that concludes today.
In the 30-share Sensex, 16 stocks gained including Cipla that surged 4.40 per cent after its profits beat estimates. BHEL, Tata Power, SBI and HDFC were among other top gainers.
Among losers, CIL dropped 2.73 per cent on reports of the fuel supply pact with power firms hitting margins. ONGC, Hero Moto, TCS and Tata Steel lost in 1-2 per cent range.
The NSE index Nifty rose 11.50 points to 5,240.50.
Buying was mainly seen in second-line stocks, an indication of retail activity, with the BSE-Midcap and BSE-Smallcap indices gaining around one per cent each.
A section of the market is betting on speedier execution of economic reforms after P Chidambaram returned today as the Finance Minister, said analysts.
However, reports that India's exports contracted for the second consecutive month in June compelled investors not to open fresh long positions in blue chips, said dealers.
European markets, including the UK, France and Germany, were last trading with an upward bias on hopes the European Central Bank would announce crucial steps later this week.
Meanwhile, rupee strengthened to 55.53 against US dollar compared to yesterday's close of 55.65. (MORE)
