Indian shares closed flat on Friday on caution ahead of the central bank's policy meeting next week, but indexes ended a second straight week with gains after the federal budget, aimed at accelerating economic growth, boosted sentiment. The broader NSE index ended up 0.08 percent at 8,740.95, gaining 1.15 percent for the week.
The benchmark BSE index closed 0.05 percent higher at 28,240.52, climbing 1.28 percent for the week.
The Reserve Bank of India is expected to cut interest rates to help revive demand at its monetary policy review on February 8, though this is not seen as a certainty. Sentiment has improved after the government on Wednesday unveiled a federal budget that was aimed at helping the poor with hikes in government spending and cuts in taxes, while raising the fiscal deficit target to only 3.2 percent from an earlier target of 3 percent.
"The market is consolidating after the strong rally on the budget day," said Vinod Nair, head of research at Geojit BNP Paribas Securities. "Going forward, the focus will be on the RBI meet next week," he added.
Auto stocks continued to fall for a second day, and were among the biggest percentage losers on the NSE after weak January sales. Tata Motors Ltd was down 1 percent. IT stocks fell after strong gains in the previous session. Infosys Ltd and HCL Technologies Ltd were down 1 percent each, after gaining nearly 2 percent on Thursday. Sun TV Network Ltd surged as much as 26 pct to an all-time high after a special CBI court on Thursday dropped all charges against former telecom minister Dayanidhi Maran and Sun TV promoter Kalanithi Maran in the Aircel-Maxis case. Asia's oldest stock exchange BSE Ltd surged as much as 48.9 percent on its trading debut.