The BSE Sensex recovered early losses and closed up 0.1 percent in a volatile session on Thursday, when global cues dominated, on hopes Athens might ditch its referendum plans.
In Athens, Greece's powerful finance minister broke ranks with his prime minister, rejecting a proposed referendum on staying in the euro, hours after they received an ultimatum from France and Germany to make up their minds.
There is a sentimental revival after the finance minister opposed the referendum talks. There is a belief now that the European crisis will be taken care of in any which way, said Arun Kejriwal, strategist at research firm KRIS. The (Greek) prime minister has been weakened by this kind of opposition from within his government, he added.
The main 30-share BSE index, which snapped a three-day fall, ended 17.08 points higher at 17,481.93, with 17 of its components falling in choppy trade. It had fallen over 1 percent during the day. The index has so far shed 15 percent since the start of the year.
Uncertainties will not go away with this and the way the markets will react going forward will entirely depend on the way the euro zone situation plays out, said Neeraj Dewan, director of Quantum Securities.
Index heavyweight Reliance Industries lead the gains, while technology stocks dragged on worries that escalating debt problems in Europe, their second-biggest market, may prompt clients to cut costs. India's No. 1 software services exporter Tata Consultancy Services ended 0.17 percent lower, while rivals Infosys Technologies and Wipro ended down 1.14 percent and 0.9 percent, respectively.
The euro zone debt crisis is a worry for the sector that has been looking to increase its sales to the region to hedge against their excessive exposure to the United States.
In the September-quarter, TCS posted a slightly lower-than-expected rise in quarterly profit, while No. 2 Infosys met street forecasts in its earnings.
Lenders fell on worries over eroding asset quality following a series of interest rate increases which have hit corporate earnings and slowed growth in Asia's third-largest economy. Private lenders HDFC Bank ended down 0.26 percent, while ICICI Bank fell 0.79 percent. Top state-run lender State Bank of India bucked the trend and traded 1.33 percent up.
RBI raised interest rates last month for the 13th and possibly final time in a tightening cycle that began in early 2010, on expectations that persistently high inflation will finally begin to ease starting in December.
However, data on Thursday showed that the food price index rose 12.21 percent, its highest in nine months. India's top steelmaker Steel Authority of India closed 3.2 percent lower after it reported net profit for the quarter ended September of 4.95 billion rupees ($100.6 million), less than half its profit for the same period a year ago, and lagging market estimates of 8.56 billion rupees.
Hindustan Unilever fell 2 percent on profit-booking after the stock rose 11 percent since the start of the week. The company on Monday posted a forecast beating 22 percent jump in quarterly net profit.
Shares of real estate firm DB Realty dived 2.1 percent after a special court rejected the bail plea of one of its founders, Shahid Usman Balwa, and former executives Asif Balwa and Rajiv Agarwal, accused in the 2G spectrum allocation case, dealers said.
The 50-share NSE index rose 0.14 percent at 5,265.75 points. In the broader market, losers were inches ahead of gainers in the ratio of 1.06:1 on total volume of about 543.9 million shares. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.48 percent, while S&P 500 futures traded in Asia gained 0.67 percent.
STOCKS ON THE MOVE
* Consumer electronics goods maker Whirlpool of India fell 6.7 percent after its September-quarter net profit fell 53 percent to 143.5 million rupees.
* Mobile content provider OnMobile Global rose 13.53 percent after its September-quarter net profit more than doubled to 477.2 million rupees.
* Hindustan Motors fell 6.6 percent after the cars and auto parts manufacturer posted a net loss in the July-September quarter.
TOP THREE BY VOLUME
* Unitech Ltd on 30.2 million shares
* Tata Motors on 21.8 million shares
* Reliance Communications on 14.7 million shares