Markets ended Monday's rangebound session on a flat note amid weak global cues ahead of the US Presidential elections on Tuesday.
The Sensex ended higher 7 points to close at 18,763 and the 50-share Nifty advanced 6 points to end at 5,704.
The Asian Markets fell on Monday and the dollar firmed as investors shied away from risk ahead of the closely fought US Presidential election, the result of which could define a clear direction for broader markets.
The Hang Seng slipped 105 points or 22,006, Nikkei slipped 44 points to 9,007, Shanghai Composite edged lower by 3 points to 2,114 and the Seoul Composite index closed weaker by 10 points at 1,908 levels.
The political uncertainty in the world's largest economy made investors wary of holdings riskier assets, and their safe-haven bids buoyed the US dollar to two-month highs against a basket of major currencies.
US President Barack Obama and Republican challenger Mitt Romney were neck-and-neck in opinion polls in the final 48 hours before Tuesday's vote.
Obama's re-election is perceived as negative for equities, while markets see Romney as stock-friendly, analysts have said.
After the US election, Congress must deal with a "fiscal cliff", up to $600 billion in expiring tax cuts and spending reductions that are set to kick in next year, which threatens the US economy.
In Europe also the markets were trading on a weak note with CAC 40, DAX and FTSE 100 slipping 0.6-1% each.
Back home, ITC was among the top Sensex gainers up 1.7% to close at Rs 288 on the back of buying at lower levels after the stock witnessed profit taking in the previous few sessions.
Cipla ended higher by up 1% at Rs 381 ahead of its second quarter earnings which will be announced later today.
In the capital goods segment BHEL was up 0.6% at Rs 230 as it gained after it saw recent correction after the central bank continued to keep key policy rates unchanged.
On the other hand, Hindalco from the metal space was the top Sensex loser, it slipped 2.5% to Rs 115 ahead of its results on Tuesday.
Bajaj Auto, Tata Power, Jindal Steel, Tata Steel, NTPC, Mahindra & Mahindra, Bharti Airtel, State Bank of India, Tata Motors, ICICI Bank, Infosys, Wipro, ONGC and Reliance Industries also faced the heat of selling pressure, ended weaker by 0.3-2% each.
Most of the sectors are faced the selling pressure.
The BSE power index was the top sectoral loser, down 0.5% or 10 points to end at 1,977. Metal, auto, IT, capital goods, oil & gas and PSU indices also closed weaker by 0.2-0.5% each. While, FMCG, healthcare, consumer durable and bankex indices ended higher.
Among the individual stocks, Allahabad Bank dipped 2.3% to Rs 135 after reporting 52% year-on-year fall in net profit at Rs 234 crore for the second quarter ended September 2012, due to lower interest income and higher provisioning for bad loans.Analyst on an average had estimated profit of Rs 454 crore from the state-owned bank.
Multi Commodity Exchange of India (MCX) advanced 2% to Rs 1,442, near its record high since its listing in March 2012, after the board declared an interim dividend of Rs 12 per equity share (120%) of face value Rs 10 each for the current financial year 2012-13.
Jet Airways (India) ended higher by 4% at Rs 376, extending its Friday's 3% gain after reporting an operating profit of Rs 453 crore for the second quarter ended September 2012, against a loss of Rs 258 crore in a year ago quarter.
Godrej Consumer Products Limited (GCPL) slipped 5% to Rs 687, it fell by over 10% from intra-day high after reporting a lower than expected 25% year-on-year (yoy) jump in consolidated net profit at Rs 159 crore for the quarter ended September 2012.
Crompton Greaves tanked 8% to Rs 112 after reporting 64% year-on-year (yoy) fall in its consolidated net profit at Rs 42 crore in the September 2012 quarter due to weakness in its overseas operations. Revenues however, grew by 8% at Rs 2,924 crore on y-o-y basis.
The broader markets ended with a negative bias with the BSE mid-cap and small-cap indices slipping 0.1 and 0.2% each.
The overall breadth was neutral as 1,495 stocks declined while 1,357 advanced.