The benchmark BSE Sensex ended the session near flat as consumer goods stocks gained on hopes that RBI would cut interest rates at its policy review on Tuesday but a slump in Sun Pharma shares capped the index gains.
Cautioned prevailed due to disappointing Q4 earnings and monsoon missing the forecast date forcing players to keep their commitments restricted, traders said.
The 30-share BSE index Sensex ended the session up by 20.55 points or 0.07 per cent at 27,848.99 and the 50-share NSE index Nifty ended down by 0.25 point or 0.00 per cent at 8,433.40.
Among BSE sectoral indices, capital goods index was the star-performer and was up 1.97 per cent, followed by realty 1.61 per cent, FMCG 1.04 per cent and oil & gas 0.69 per cent. On the other hand, healthcare index plunged the most by 2.81 per cent, followed by infrastructure 0.82 per cent, banking 0.55 per cent and auto 0.34 per cent.
Top five Sensex gainers were L&T 3.03%, Reliance 2.76%, HUL 2.31%, Maruti 2.84% and Tata Power 1.81%, while the major losers were Sun Pharma 8.99%, Bharti Airtel 2.12%, Tata Motors 1.96%, ONGC 1.79% and HDFC Bank 1.42%.
Repo rate cut
Hopes that the central bank would cut interest rates lifted some rate-sensitive firms, but Sun Pharmaceutical Industries slumped after posting disappointing earnings.
Rate-sensitive firms were among the day's gainers, with Housing Development Finance Corp ending up 1 per cent.
Drug major Sun Pharma tumbled 8.99 per cent to close at Rs 878.95 after its fourth quarter earnings came below market expectations.
The Reserve Bank of India is due to hold its policy review on Tuesday and most analysts expect the central bank to ease rates by 25 basis points after cutting rates by the same amount in January and again in March.
The Nifty and the Sensex opened flat to negative in the absence of directional cues. The Nifty opened 17 points down at 8,417, while the Sensex opened 57 points down at 27,771.
A report by SMC Investments and Advisors said: " Asian stocks were mixed led by China despite signs of contraction in the manufacturing sector. US stocks lost as investors pulled out of high dividend yielding stocks as uncertainty over rate hike decreases.The manufacturing sector in China remained in contraction in May, the latest report from HSBC Bank showed, with a manufacturing PMI score of 49.2.That was in line with expectations, and it represented a slight upward revision from last month's flash estimate reading of 49.1. It was up from 49.9 in April, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction in a sector."
European stock markets inched higher on Monday, putting aside concerns over Greece that unsettled the euro after Chinese stocks rallied almost 5 per cent.
The FTSE Eurofirst index of 300 leading European companies was up 0.6 per cent, reflecting gains in all of its major markets. MSCI's broadest index of Asia-Pacific shares outside Japan was a touch lower after earlier dropping to its lowest intraday level since April 7.
Asian shares slipped on Monday after separate surveys of Chinese factory activity failed to banish concerns about a slowdown in the world's second-largest economy.
Persistent fears about Greece's financial situation and downbeat US data also sapped investors' confidence.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 4.9 per cent, its biggest one-day rise since December 2012.