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Domestic equity benchmark BSE Sensex ended marginally lower after a see-saw session Thursday as lack of buying triggers kept trading sentiment at a low ebb.
A depreciating rupee and weak global cues also weighed on the markets, traders said.
After plunging over 300 points intra-day, the BSE gauge pared most losses to settle 15.45 points, or 0.04 per cent, lower at 39,741.36.
However, the broader NSE Nifty inched up 7.85 points, or 0.07 per cent, to close at 11,914.05.
Yes Bank was the biggest loser in the Sensex pack for the second consecutive session, plummeting 12.96 per cent, after Moody's placed the private sector lender's ratings under review for a possible downgrade.
IndusInd Bank, Infosys, Maruti, Vedanta, Hero MotoCorp, Tata Motors, ONGC and RIL too fell up to 4.96 per cent.
Top gainers included PowerGrid, M&M, Kotak Bank, Bajaj Finance, Bharti Airtel and HDFC twins, rising up to 1.54 per cent.
According to experts, market mood was subdued amid rising uncertainty over trade talks between the US and China. Oil prices soared following conflicting reports of attacks on two oil tankers in the Gulf of Oman and the Strait of Hormuz.
However, losses were capped as investors took positive cues from factory output numbers, released after market hours on Wednesday.
India's industrial output grew to a six-month high of 3.4 per cent in April mainly on account of improvement in mining and power generation, while retail inflation spiked to a seven-month high of 3.05 per cent in May, though remaining within the RBI's comfort level.
"Benchmark indices ended on a flat note amid weak global cues. After opening negative, Nifty reversed its trend and closed positive above 11,900 levels. However, investors remained cautious on Nifty and Bank Nifty weekly expiry day.
"Post election euphoria, markets to shift focus on earnings visibility, onset of monsoon and various economic reforms and policies by way Union Budget. On global front, US-China trade wars along with oil price volatility will determine further trend," said Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas.
Sectorally, BSE teck, auto, energy and healthcare indices ended up to 0.57 per cent lower. Realty, power, finance, consumer durables and utilities gained up to 0.62 per cent.
In the broader markets, the BSE midcap and smallcap indices under-performed the benchmarks to close up to 0.50 per cent lower.
Meanwhile, foreign institutional investors offloaded shares worth a net Rs 1,050.43 crore on Wednesday, provisional data made available with the exchanges showed.
Brent crude futures, the global oil benchmark, rallied 3.54 per cent to USD 62.09 per barrel.
Elsewhere in Asia, while Shanghai Composite Index rose marginally, Hang Seng, Nikkei and Kospi ended in the red.
On the other hand, stock exchanges in Europe were trading in the green in early deals.
On the currency front, the Indian rupee depreciated 16 paise to 69.51 against the US dollar intra-day.
