Indian shares erased losses in late trade to end marginally higher on Friday, snapping two days of losses, led by buying in index heavyweight Reliance Industries, even as investors stayed cautious in anticipation of company results beginning next week.
Earnings from Indian companies are largely set to disappoint as most of them have been reeling under the impact of slowing growth, sluggish consumer demand and high borrowing costs.
The main 30-share BSE index ended 0.07 percent higher at 15,867.73, with more than half of its components ending in the red. The benchmark index fell as much as 1.2 percent during the day. The index, which fell nearly a quarter in 2011, rose 2.7 percent this week.
Reliance Industries controlled by billionaire Mukesh Ambani, ended 2.6 percent higher. Anil Dhirubhai Ambani Group (ADAG) companies such as Reliance Communications, Reliance Power and Reliance Infrastructure ended up between 3 and 5 percent, off their highs.
Media reports said the long-feuding Ambani brothers would hold a joint press conference later in the day to announce a strategic tie-up. The reports were denied by Reliance Industries and ADAG.
Shares of top mobile phone carrier Bharti Airtel fell 4.02 percent on concerns the Nigerian government's removal of a subsidy on auto fuels will reduce use of telecom services in the country as the cost of living goes up, two institutional dealers said.
"The market has turned cautious from the past two days. The earnings season is expected to start next week and leaving a few sectors out, the results are largely set to disappoint," Jagannadham Thununguntla, head of research, SMC Global. Traders also said the market will await further cues from the monetary policy review scheduled later this month as slowing inflation raised hopes for a reversal in the interest rate cycle.
Data on Thursday showed the food price index declined for the first time in nearly six years, raising hopes the December headline inflation rate will drop below 9 percent for the first time in more than a year.
Pantaloon Retail ended up 6.6 percent and Shoppers Stop surged 5.6 percent. State Bank of India, fell 1.2 percent after the top lender said it considered loans given to cash-strapped Kingfisher Airlines as a non-performing asset. Kingfisher ended 4.7 percent, after slumping as much as 11 percent, a day after the country's aviation regulator asked the carrier to provide a specific timeline for getting its grounded aircraft back in the air and for its recapitalisation efforts.
The broader 50-share NSE index ended down 1.3 percent at 4,690.3. In the broader market, there were 1.6 losers for every gainer on volume of 146 million shares. The Bombay Stock Exchange and National Stock Exchange will hold special trading sessions for one-and-a-half hours each on Saturday.