The Sensex and the Nifty ended marginally in the red as investors remained cautious ahead of RBI's mid-quarter monetary policy review on December 18 and the Federal Open Market Committee meeting on December 17 and 18.
The US Federal Reserve could spell out its plans on when it could begin tapering its $85-billion-a-month bond-buying programme.
Domestic sentiment was also dampened owing to rise in WPI inflation to a 14-month high of 7.52 per cent in November, higher-than-expected consumer price inflation at 11.2 per cent and lacklustre numbers from auto companies.
The 30-share BSE index Sensex was down 56.06 points (0.27 per cent) at 20,659.52 and the 50-share NSE index Nifty was down 13.7 points (0.22 per cent) at 6,154.70.
Sectoral gainers & losers
On the BSE, IT, consumer durables, TECk and healthcare indices remained investors' favourite and were up 1.56 per cent, 1.2 per cent, 1.03 per cent and 0.81 per cent.
On the other hand, oil & gas, auto, FMCG and banking indices succumbed to selling pressure and were down 1.61 per cent, 0.7 per cent, 0.49 per cent and 0.05 per cent, respectively.
Top 5 Sensex gainers/losers
SSLT, Infosys, Tata Power, Coal India and ICICI Bank were the top five Sensex gainers, while the top five losers were Jindal Steel, Sun Pharma, Bharti Airtel, RIL and M&M.
Rajesh Agarwal, Head-Research, Eastern Financiers, said in a report: “Markets are expected to remain volatile in the coming week on the headline inflation announcement, followed by the crucial RBI monetary policy review. Also, the Q3FY13 advance tax numbers that are going to trickle-in, in the early part of the week, is expected to have its effect on market performance. The other important factor on the investor’s watch-list would be the development in the next FOMC meet slated on December 17and 18.”
European stocks rose after a key index measuring economic output in the euro zone rose to 52.1 in December. Asian shares fell towards a three-month low as a survey showed Chinese manufacturing expanding less than estimated and the yen strengthened.