The Nifty edged lower in trades on Wednesday as investors booked profits ahead of quarterly results.
Uncertainty also prevailed in the market as investors await the government's announcement on the next central bank governor after local media reported it could come this week.
Meanwhile, soaring food prices drove headline inflation to its highest level in nearly two years in June, data released late on Tuesday showed, increasing the odds of the central bank keeping interest rates on hold next month.
"Traders are booking profits as we move into the earnings season, where broad-based moves are expected to be replaced by sector-specific moves," said Anand James, chief market analyst at Geojit BNP Paribas Financial Services.
The Sensex closed 7 points higher at 27,815 and Nifty slipped 2 points to settle at 8,519.
Banking, realty, auto, capital goods, FMCG and pharma indices ended lower on account of profit-booking. On the other hand, metal and oil & gas stocks witnessed buying interest.
Power Grid was the top Nifty loser, the stock fell 2.85 per cent to close at Rs 161.85. BPCL, IndusInd Bank, Lupin and Bosch were also among the losers.
Dairy food processor Kwality Ltd gained 6.1 per cent on Rs 520 crore capital commitment from KKR, while Bharat Heavy Electricals hit a near six-month high on report of a new power plant deal.
NBCC shares slumped 12.5 per cent on Wednesday, following the government's decision to divest 15 per cent stake in the state-run construction company. The 15 per cent stake sale would likely add Rs 1,700 crore to the exchequer, helping the government meet its ambitious Rs 56,500-crore disinvestment target in 2016-17.