After opening 74 points higher on strong Asian cues, the BSE benchmark index rose to the day's high of 17,236.08 soon after but lost momentum from thereon.
The Sensex finally closed 1.99 points up at 17,105.30, supported by gains in FMCG and Healthcare shares.
In the 30-share index, 17 stocks including Bajaj Auto, TCS, Bhel and ONGC ended lower while 13 scrips including Wipro, Dr. Reddy's, ITC and Bharti Airtel gained.
The Sensex had lost 515 points or nearly 3 per cent in the last four days amid investors remaining cautious about the economic prospects as deficient monsoon rain could fan inflation, still above the Reserve Bank's threshold level.
"After a good opening, shares succumbed to selling. Results season is characterised by stock-specific action," said Inventure Growth & Securities Head Research Milan Bavishi.
The rupee also frittered away its early gains and was trading at 55.05 levels after going up to 54.9 in morning.
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Brokers said a better trend in Asia and European stock markets steadied the sentiment, helping the Indian market cushion against deep losses.
Asian indices, including those in Singapore, China and Japan, ended higher with investors hoping that US Federal Reserve Chairman Ben Bernanke will suggest in his semi-annual testimony to the Congress today that fresh policy-easing moves may be on the cards, said experts.
However, the National Stock Exchange index Nifty ended lower by 4.40 per cent, 0.08 per cent to 5,192.85. (MORE)