Shares struggled for direction in a volatile session on Monday, having erased intraday losses, as gains in banking stocks offset the decline in IT ahead of the local retail inflation data.
The Nifty 50 index rose 0.01% at 18,499.50, as of 11:35 a.m IST, and the S&P BSE Sensex fell 0.05% to 62,146.02. Both benchmarks had fallen 0.8% at the open.
All the major sectoral indices, except the Nifty IT advanced, while the tech index also trimmed intraday losses.
Since the Reserve Bank of India's latest rate hike on Dec. 7, the markets have swung between gains and losses in intraday trade. The Nifty 50 has fallen 0.25% over the last three sessions.
"The consolidation and intraday volatility, like in today's session, will continue for the next few weeks, as investors eye key events in the U.S. and domestic retail inflation data", said Ajit Mishra, Vice President - Technical Research at Religare Broking.
The strength in the banking sector was the "silver-lining" offsetting the weakness in IT and pharma sectors, Mishra added.
IndusInd Bank, HDFC Bank and HDFC were among the top gainers on the Nifty 50 index.
In contrast to the benchmark, the Nifty Midcap 100 has risen 0.4% since Dec. 7.
Investors were also focused on domestic consumer price inflation data, due at 5:30 p.m. IST. According to a Reuters poll, the November CPI likely cooled to a nine-month low of 6.40% from 6.77% in October.
Inflation has stayed above the upper end of the RBI's 2%-6% tolerance band all year, prompting the central bank to raise the repo rate by 35 basis points last week.
Also on global markets' radar will be the interest rate decisions by the U.S. Federal Reserve and the European Central Bank, due later this week.
U.S. consumer inflation data for November, scheduled to be released on Tuesday, is likely to set the tone for markets after stronger-than-expected producer prices print triggered worries for a prolonged Fed rate hike cycle.