Rising inflation and interest rates remain a concern, he added.
Retail inflation rate likely rose to a 17-month high in December, a Reuters poll showed, suggesting increasing pressure on the central bank to tighten monetary policy.
"There is nervousness around crude oil as well. Fundamentally, investors are looking at the impact crude (prices) will have on the margins," Sharma said.
IT stocks advanced, with Infosys rising over 2 per cent. The company is due to report quarterly results on Friday. Tech Mahindra also rose nearly 1.5 per cent. TCS shares were muted, down 0.40 per cent, ahead of quarterly earnings later in the day. (With Agency Inputs)
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