The Sensex and Nifty ended nearly flat on Tuesday as investors were cautious ahead of Federal Reserve Chair Janet Yellen's speech later this week at the gathering of central bankers in Jackson Hole, Wyoming, for further cues on US interest rates.

Sentiment was also muted ahead of the expiry of the derivative contracts on Thursday.

The benchmark BSE index ended 4.67 points or 0.02 per cent higher at 27,990.21, while the broader NSE index closed up 3.45 points or 0.04 per cent at 8,632.60.

Among BSE sectoral indices, oil & gas index fell the most by 1.48 per cent, power 1.11 per cent, capital goods 1.1 per cent and FMCG 0.82 per cent. On the other hand, IT index was up 1.82 per cent, TECk 1.78 per cent and banking 0.11 per cent.

Top five Sensex gainers were Infosys (+2.35%), TCS (+2.03%), Asian Paints (+0.99%), Bharti Airtel (+0.96%) and Wipro (+0.82%), while the major losers were NTPC (-2.9%), Bajaj Auto (-1.92%), L&T (-1.11%), ITC (-1.08%) and Sun Pharma (-0.97%).

Among the gainers, Reliance Infrastructure Ltd rose 2.4 per cent after the company completed the sale of its cement unit to Birla Corp Ltd on Monday.

Shares of Indraprastha Gas gained as much as 7.8 per cent to a record high of Rs 786.60 after the company posting about 44 per cent jump in its June-quarter profit, ahead of market expectations.

But oil refiner Hindustan Petroleum Corp fell 3.9 per cent despite posting a near 30 per cent jump in its June-quarter profit on profit-booking.

Yellen's speech

As the earnings season draws to a close, investors' focus will shift to Federal Reserve Chair Janet Yellen's speech on Friday at the annual central bankers' meeting in Jackson Hole, Wyoming, to assess the odds of an interest rate hike in the coming months.

Broader sentiment also remained edgy with Asian shares inching higher, while oil prices fell for a second straight session on supply concerns.

Foreign investors have been buying into Indian shares apart from those in other emerging markets this year, with Friday marking their 30th consecutive session of purchases, bringing the total net investments in the year to $5.85 billion.

But a rate hike by the Federal Reserve could pause the liquidity-driven rally in Indian stocks, which have risen about 24 per cent from their February lows, analysts say.

“There's some bit of caution ahead of the Fed announcement as a rate hike will definitely stall this rally that we have seen in Indian stocks and result in some selling pressure,” said Rikesh Parikh, vice-president of equities at Motilal Oswal Securities.

World shares crept up on Tuesday while the dollar lost ground as investors awaited further clues on whether the Federal Reserve will raise US interest rates this year.

European equities were 0.5 per cent higher led by mining and banking stocks after data that pointed to a gradual improvement in the region’s economy. The euro also posted gains.

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