Benchmark shares ended flat shrugging off Reserve Bank of India's neutral stance on key policy rates but the Sensex ended tad lower for September snapping a seven-month rally from February to August.
The 30-share Sensex ended up 33 points at 26,630 and the 50-share Nifty closed 6 points up at 7,965.
RBI Monetary Policy:
RBI after its fourth bi-monthly monetary policy review kept the policy repo rate under the liquidity adjustment facility unchanged at 8.% and the cash reserve ratio of scheduled banks unchanged at 4% of net demand and time liabilities.
It has reduced the liquidity provided under the export credit refinance (ECR) facility from 32% of eligible export credit outstanding to 15% with effect from 10 October 2014.
The rupee remained volatile was trading near its day's lows at 61.71 to the US dollar after the RBI kept key policy rates unchanged. The rupee had closed at Rs 61.53 in the previous session.
Meanwhile, the dollar is on track to post its biggest monthly gain in over a year.
Shares in Japan ended nearly 0.9% lower after weak economic data and a profit warning from Sumitomo Corp dampened sentiment. The benchmark Nikkei ended down 0.8%.
Hang Seng has continued to decline and ended down 1.3% its lowest in three months because of the civil unrest in Hong Kong. Singapore's Straits Times ended down 0.4%.
China's factory sector posted lower than expected HSBC/Markit Manufacturing Purchasing Managers' Index quoting at 50.2 in September, unchanged from the August reading which was a three-month low.
A preliminary reading of 50.5 was expected for the month of September. Shanghai Composite ended up 0.3%.
Sectors and Stocks:
The BSE Metal,Power,Realty, Capital Goods and Bankex indices were the top sectoral losers down 0.5-2.7% each.
In the IT pack, Infosys and TCS ended down 0.1-1% each amid profit taking after recent gains.
Private banking majors ICICI Bank and Axis Bank closed down 2.2% each.
Auto shares were under pressure ahead of the release of September sales numbers from tomorrow. Tata Motors, M&M, Hero Moto Corp ended down 0.8-1.6% each.
HDFC Group shares HDFC Bank and HDFC were the top Sensex gainers up 0.8-2.2% each.
Pharma shares ended higher with Sun Pharma up 2.8%, Dr Reddy's Labs rose 0.7% and Cipla ended 1.6% higher.
Among other shares, tyre makers rallied by up to 10% on hopes of higher margins due to falling rubber prices.
Ceat, MRF, J K Tyre, TVS Srichakra, Apollo Tyres, Goodyear India, Falcon Tyres and Dunlop India were among the gainers.
Sterlite Technologies ended 5% higher following the announcement of a Joint-Venture agreement with VISCAS Corporation, a leading Japanese company on September, 29 2014.
Hexaware Technologies rallied 2.4% after huge block deals executed on BSE.
About 27.3 million equity shares representing 9.1% of total equity of the mid-sized information technology firm have changed hands in block deal between price of Rs 197 and Rs 199, the BSE data showed.
Bhushan Steel ended in 5% upper circuit at Rs 118 after the company said that Neeraj Singal, vice chairman and managing director of the company who was in judicial custody haS been released on bail on September 27, 2014.
In the broader market, the BSE Mid-cap index ended up 0.1% and Small-cap index ended flat.
Market breadth ended weak with 1,530 losers and 1,353 gainers on the BSE.