The BSE Sensex closed little changed in cautious and choppy trading ahead of industrial output data due on Thursday and quarterly results that are expected to show a slowdown in earnings growth.
Software services firms were among the major losers, led by Infosys (INFY.NS), which fell 1.29 percent, and larger rival Tata Consultancy Services (TCS.NS), which dropped 2.44 percent.
Infosys, which usually sets the tone for corporate earnings, is expected to report a 30 percent rise in December quarter profit on Thursday, but the market will be focusing on any revision in its forecast for the fiscal year ending March 31.
India's showcase $76-billion software services sector, which gets most of its revenue from overseas, is expected to benefit from the rupee's depreciation but the optimism is tempered by the uncertain outlook for the world's developed economies.
Everybody is playing cautious. They are waiting for industrial output data and corporate results, said R. K. Gupta, managing director at Taurus Mutual Fund.
Industrial output data for November probably rose at an annual rate of 2.2 percent, boosted by a rise in infrastructure sector output and auto sales, a Reuters poll showed.
The 30-share BSE index rose 0.07 percent, or 10.77 points, to 16,175.86, with 16 of its components rising. The index fell by almost 25 percent in 2011.
Retailers rallied a day after the government formally eliminated restrictions on foreign investment in the single-brand retail sector, raising hopes that rules for multi-brand retail will also be liberalised soon.
This is probably an indication that government is finally moving on the policy front. And this is quite positive for the broader market, said D.D. Sharma, CEO at Risk Capital Adviser.
Pantaloon Retail (PART.NS), which has been in tie-up talks with foreign retailers, rose 4.43 percent, while departmental store chain Shoppers Stop (SHOP.NS) gained 5.14 percent.
Energy major Reliance Industries (RELI.NS) rose 1.64 percent, while ICICI Bank (ICBK.NS) and top lender State Bank of India rose 0.73 and 1.43 percent respectively.
Utility vehicle maker Mahindra and Mahindra (MAHM.NS) fell 1.28 percent, while tobacco-to-leisure company ITC (ITC.NS) lost 0.9 percent.
It's a day of consolidation for the market after the sharp rally yesterday. There is some profit-taking, Sharma said.
The 50-share NSE index .NSEI ended 0.24 percent higher at 4,860.95. In the broader market, there were nearly 2.5 gainers for every loser on volume of 798 million shares.
STOCKS THAT MOVED
* Amtek India (AMTI.NS) rose as much as 5.2 percent after the auto parts maker reported a 34.36 percent jump in December quarter profit. The shares closed up 1.23 percent at 99.05 rupees.
* Suzlon Energy Ltd (SUZL.NS) rose 4.33 percent to 20.50 rupees after it said its Brazilian unit got an order to set up, run and maintain a 24 megawatt wind power project.
* Reliance Infrastructure (RLIN.NS) rose as much as 3.4 percent on news that the company has completed the 6 billion rupee, 90 km Trichy-Dindigul road widening project in Tamil Nadu and that toll collections would start from Wednesday. Its shares ended up 1.38 percent at 404.60 rupees.
TOP 3 BY VOLUME
* Suzlon Energy (SUZL.NS), 30.16 million shares
* Housing Development & Infrastructure (HDIL.NS), 28.59 million shares
* DLF (DLF.NS), 27.55 million shares