Indian markets ended the session near flat after remaining range-bound in the morning trade.
According to market watchers, trade remained choppy as investors were cautious ahead of the third quarter earnings. The earnings season would begin with the announcement of Infosys quarterly results on Friday.
The 30-share BSE index Sensex was down 16.01 points or 0.08 per cent at 20,713.37 and the 50-share NSE index Nifty was down 6.25 points or 0.1 per cent at 6,168.35.
All broader and sectoral indices ended flat. On the BSE, realty, capital goods, banking and auto indices lost investors' support and were down 2.31 per cent, 2.03 per cent, 0.74 per cent and 0.57 per cent, respectively.
On the other hand, metal, oil & gas, IT and healthcare indices capped the Sensex losses and were up 1.06 per cent, 0.76 per cent, 0.47 per cent and 0.46 per cent, respectively.
SSLT, NTPC, ONGC, Coal India and Dr Reddy's were the top five Sensex gainers, while the top five losers were L&T, Axis Bank, Hindalco, M&M and Maruti.
A report from India Forex Advisors said: “The strong chest of forex reserves till now has been able to offset the impact of QE tapering. However, it would be important to foresee the further steps of RBI for building up the reserves as a gradual recovery in the US economy will lead to a faster pace of QE tapering. This situation is to be taken care of especially amid the gimmicks of Indian general elections in May 2014.”
European shares rose as investors awaited the European Central Bank's interest rate decision.
Asian shares were down as China’s factory-gate prices extended the longest streak of declines since the Asian financial crisis and the Federal Reserve minutes showed officials saw diminishing benefits from bond-buying.
Federal Reserve officials also voiced concern about future risks to financial stability during their last meeting, when they began to cut the pace of purchases.
Policy makers will gather on January 28 & 29 to consider the next step in their strategy of gradually reducing the pace of bond buying as the economy strengthens.
The minutes did not describe a set schedule, but most members were for pruning the $85 billion a month stimulus package, though cautiously.