MUMBAI: Indian shares were little changed on Thursday, after the earnings season failed to provide any cheer to investors buffeted by surging interest rates and slowing economic growth.
Concerns about the euro zone debt crisis and its impact on the global economy and the financial system also weighed on investor sentiment in Asia's third-largest economy.
Shares in energy major Reliance Industries led the losses, falling 2.5 percent to 826.70 rupees, as institutional investors pared their holdings in the index heavyweight. The stock is down nearly a fifth this year.
The main 30-share BSE index was trading up 0.02 percent at 16,778.17 at 11:25 a.m. (0555 GMT), after having fallen as much as 0.7 percent earlier, with half of its components falling.
"The quarterly numbers of many frontline firms were poor as most of them are suffering due to higher borrowing and input costs, and slowing demand," said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.
"This quarter's results are not likely to show any change in the trend due to the current interest rate regime and that's a concern for the investors," he said. "This and the global macroeconomic worries will keep the markets under pressure."
The benchmark is down more than 18 percent in 2011.
India's central bank has been among the most aggressive central banks globally, increasing rates 13 times since early 2010, which has dented consumer spending and investment by companies while inflation remains near double digits.
Weak global demand is exacerbating the slowdown in the Indian economy whose growth this year might be well below the 8.5 percent heady pace in the fiscal year that ended in March.
A weaker rupee failed to trigger support for export-driven software services firms such as Infosys and Wipro amid worries that a blowup of Europe's problems could drag the United States back into recession.
Fitch Ratings warned that it may reduce its "stable" rating outlook for US banks with large capital markets businesses because of contagion from problems in troubled European markets.
Infosys fell nearly 1 percent to 2,751.05 rupees and Wipro dropped 0.7 percent to 371.60 rupees. The technology sector index was trading 0.7 percent lower.
Top mobile operator Bharti Airtel climbed as much as 0.8 percent after a senior Bharti executive said on Wednesday the firm saw a rise in the uptake of third-generation (3G) services it launched earlier this year.
Software services company Patni Computer Systems rose as much as 11 percent to 432.40 rupees, the highest level in more than 10 months, after US-listed parent iGate said it planned to delist Patni.
The delisting, expected to be completed by mid-2012, will be done through a reverse book-building process, iGate said in a statement late on Wednesday.
The 50-share NSE index was trading down 0.03 percent at 5,028.70 points. In the broader market, losers were slightly ahead of gainers in the ratio of 1.4:1 on moderate volume of about 162 million shares.
Asian shares and the euro fell as doubts deepened about Europe's ability to stop its sovereign debt crisis from spinning out of control, with the region's biggest nations split over the European Central Bank's bond buying role.
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