The Sensex and the Nifty ended the session near flat as investors remained wary ahead of industrial production (IIP) numbers for July and consumer price inflation (CPI) for August to be released later in the day.
The 30-share BSE index Sensex ended down by 11.96 points or 0.05 per cent at 25,610.21 and the 50-share NSE index Nifty ended up by 1.2 points or 0.02 per cent at 7,789.30.
Among BSE sectoral indices, realty index gained the most by 0.73 per cent, followed by IT 0.44 per cent, FMCG 0.4 per cent and consumer durables 0.3 per cent. On the other hand, metal index was down 1.53 per cent, followed by capital goods 0.52 per cent, oil & gas 0.32 per cent and auto 0.29 per cent.
Top five Sensex gainers were SBIN (+1.12%), nfosys (+0.96%), Wipro (+0.93%), HDFC (+0.88%), and Dr Reddy's (+0.75%), while the major losers were Tata Steel (-3.02%), VEDL (-2.56%), GAIL (-2.48%), Tata Motors (-2.46%) and BHEL (-2.22%).
Defensive stocks such as Infosys rose amid uncertainty over a US rate hike next week and domestic monsoon deficit.
June-September monsoon, which irrigates nearly half of the country's farmlands, has started withdrawing from the north-western region, which could increase the rainfall deficit for the season.
Consumer price inflation is expected to have slowed to a record-low in August, hit by slack global energy costs and low food prices, likely increasing pressure on the central bank to cut rates at its meeting later this month.
The Reserve Bank has lowered rates by 75 basis points since January with three cuts. However, it left the policy repo rate on hold at 7.25 percent at its last meeting, tying future cuts to the inflation outlook.
"People are positioning on Fed related caution. There is a growing belief that central bank governor would like to see how Fed plays before any decision," said G. Chokkalingam, founder of Equinomics, a Mumbai-based research and fund advisory firm.
A report by SMC Global said: "Asian shares rose on Friday thanks to gains on Wall Street, while the dollar steadied after facing pressure from a rallying yuan and US data that offered no clarity on whether the Federal Reserve might raise interest rates next week. On Wall Street, major indexes marked solid rises on Thursday, but European stocks broke a three-day run of gains with a drop of nearly 1.5 per cent. With fuel prices showing another substantial decrease, the Labor Department released a report showing that US import prices fell more than expected in the month of August. The Labor Department said import prices tumbled by 1.8 per cent in August following an unrevised 0.9 percent decrease in July. Economists had expected import prices to drop by 1.6 per cent."
Global markets
A top European share index was set for its biggest weekly rise since July despite edging lower on Friday, with drops in Germany’s E.ON and Swiss pharmaceutical firm Actelion taking the shine off the week’s rally.
The pan-European FTSEurofirst 300 is up 1.1 per cent so far this week, set for its biggest weekly rise in around two months despite falling 0.5 per cent to 1,408.27 by 0748 GMT points on Friday.
Asian shares rose on Friday following gains on Wall Street, while the dollar firmed after facing pressure from a rise in the yuan, but gains were capped by uncertainty over whether the Federal Reserve will raise interest rates next week.
MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.8 per cent, and on track to rise more than 3 per cent for the week.