"We do not expect a change in policy. Most likely, the Committee will think about further refining its communication with the public," a research note from Rabobank International mentioned.
Risk appetite was also muted after the Reserve Bank of India in its third-quarter monetary policy review raised concerns over inflation and said that the government should initiate measures to control the fiscal deficit.
The Bombay Stock Exchange's 30-share index Sensex rose 14.10 points and ended at 20,005.00 while the National Stock Exchange's 50-share Nifty gained 5.85 points to end at 6,055.75.
In the results calendar, Bharti Infratel, ICICI Bank, Godrej Consumer Products, Lupin, Punjab National Bank, Siemens, Shobha Developers, Tata Global Beverages, Trent are scheduled to announce third-quarter results on Jan 31
Asian shares ended on a positive note. Hong Kong's Hang Seng rose 0.7 percent to 23,822, Taiwan's Weighted index gained 0.4 percent to 7,832, Singapore's Straits Times inched up 0.64 percentto 3,284 while China's Shanghai Composite gained 1 percent to 2,382 and Japan's Nikkei surged 2.3 percent to 11,113.
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US Federal Reserve ends a two-day policy meeting on Wednesday with investors focusing on the statement for any clues regarding a pull back from its aggressive easing stimulus.
Meanwhile, European markets traded flat. France's CAC gained 0.08 percent to 3,788, Germany's DAX was up 0.05 percent
to 7,852 while UK's FTSE was down 0.15 percent to 6,329.
Back home, oil & gas, consumer durables,, banks rose while capital goods, auto, power and FMCG sectors, declined on BSE.
Among key Sensex stocks, Cipla rose 2.6 percent, HDFC Bank and ICICI Bank gained 0.5 percen and 1 percent respectively,Sterlite Industries gained 1.4 percent and Tata Steel notched up 1.7 percent, Reliance Industries gained 2 percent on BSE.
Among losers, GAIL fell 3.3 percent, ITC fell 1 percent, Larsen & Toubro and BHEL dropped 2 percent and 0.6 percent
, SBI dropped 1percent on BSE.
The other notable movers included, National Aluminium Company Limited (Nalco) which surged by 8 percent to Rs 50 after reporting a better-than-expected net profit of Rs 119 crore in the third quarter ended December 2012 (Q3) against Rs 51 crore in a year ago quarter, due to higher other income.
KRBL gained 5 percent to Rs 26.60 after the company engaged in packaged foods business announced buyback of equity shares.
Ipca Laboratories dipped 2 percent to Rs 479.10, after reporting lower-than-expected 37% year-on-year (yoy) jump in net profit at Rs 88 crore for December 2012 (Q3) quarter, due to higher raw material cost.
The broader markets ended weak with mid-caps and small-caps falling 0.03-0.2% on BSE.
The market breadth was weak as 1,219 stocks declined compared to 969 advances on BSE.