The Sensex ended marginally higher on Wednesday after gaining over 0.5 per cent in intra-day trade. The Nifty ended in the negative territory though it managed to close above 10,050 points.
Analysts opined that the indices would continue to rise in the near term, although advances would be tempered by caution over global risk factors and the domestic economy.
Data late on Tuesday showed India's consumer price inflation rose more than expected to a five-month high of 3.36 per cent, dampening chances of a rate cut by the central bank at its policy review next month.
The UN Security Council voted unanimously to boost sanctions on North Korea on Monday, but a tougher initial US draft was weakened to win the support of China and Russia, both of which hold U.N. veto power.
“The Korea tensions have eased and the markets are near all time high,” said A.K. Prabhakar, head of research at IDBI Capital Markets & Securities Ltd.
The broader NSE index ended down 13.75 points or 0.14 per cent at 10,079.30. The index see-sawed 69 points in intra-day trade hitting a high of 10,131.95 and a low of 10,063.15. The broader index had hit a record high of 10,137.85 on August 2.
The benchmark BSE index ended 27.75 points or 0.09 per cent higher at 32,186.41.
Shares of drug makers, which have been among the big losers this year, climbed on Wednesday, with Sun Pharmaceutical Industries Ltd up 4.02 per cent, and Dr.Reddy's Laboratories Ltd rising 2.09 per cent.
The Nifty Pharma index fell 13.7 per cent as of August-end, but has gained about 3 per cent so far this month.
Bank shares also gained on hopes of additional capital infusion from the government, with Bank of India Ltd and Union Bank of India Ltd up more than 3 per cent and 1.67 per cent, respectively.
The Nifty PSU Bank index has recovered slightly this month after slumping 11.6 per cent in August.
Among other gainers, shares of Reliance Industries Ltd climbed nearly 4 per cent to hit a record high, while financial firm Capital First Ltd hit a more than 9-year high after India's banking regulator raised its foreign investment limit to 50 per cent.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 1,230.74 crore yesterday, as per provisional data released by stock exchanges.
Domestic institutional investors (DIIs) bought shares worth a net Rs 1,313.08 crore as per provisional data.
Stock-specific action
Shares of Tata Power Co Ltd rose as much as 7.03 per cent, its biggest intra-day percentage gain gain since July 10.
The stock ended at Rs 85.05, up Rs 4.05 or 5 per cent on Wednesday.
Over 31 million shares changed hands vs 30-day average volume of 4.1 million.
Analysts cited market speculation that the company may sell some of its stake in Tata Group companies to Tata Sons, in a move to reduce the complex cross-holding structure of the conglomerate
Other Tata units, Tata Global Beverages and Tata Chemicals Ltd on Tuesday proposed to sell up to 10.5 million and 43.2 million shares they held in each other, respectively, to Tata Sons
Shares of Tata Chemicals finished 0.66 per cent or Rs 4.20 higher at Rs 637.50, while those of Tata Global Beverages ended down 1.53 per cent or Rs 3.25 at Rs 208.80.
Up to Tuesday’s close, Tata Power shares had gained 6.7 per cent this year.
Global markets
Disappointment over the timing of Apple’s iPhone X release hampered further gains for world stock markets on Wednesday after an easing of concerns about North Korea sent indices to record highs. With Tokyo gaining on a broadly weaker yen, MSCI’s main indicator of Asian shares hit a 10-year peak, but Europe’s main markets all dipped in early trade.