Caution over Bihar election results, ongoing results season and heightened chances of a US rate hike eroded investors' confidence in the Indian equity markets, leading to a barometer index trading flat during post-afternoon trade on Tuesday.
Both the bellwether indices of the Indian equity markets opened in the positive territory on the back of robust economic data, value buying and positive Asian indices.
However, both indices ceded their initial gains as caution grew on the heightened chances of a US rate hike.
Furthermore, investors were seen anxious about the Bihar election results and ongoing results season.
Short covering were observed, as investors exited their investment positions after six consecutive sessions of losses at the bellwether indices.
The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,660.71 points, was trading at 26,552.39 points (at 1.45 p.m.) -- down 6.76 points or 0.03 percent from the previous day's close at 26,559.15 points.
The 50-scrip Nifty of the National Stock Exchange (NSE) was also trading flat having slipped 7.85 points or 0.10 percent at 8,042.95 points.
The Sensex has so far touched a high of 26,732.24 points and a low of 26,514.48 points during the intra-day trade.
The S&P BSE Sensex had closed previous day's trade down 98 points or 0.37 percent.
Market observers said the initial gains were ceded as investors grew cautious about the Bihar election results and crucial data on the US economy.
"The markets had initially made healthy gains on the back of robust ECI data that showed a substantial increase in output. The ECI forms the largest component of the Index of Industrial Production (IIP). The data restored investor confidence in the Indian growth story," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"Short coverings after six consecutive days of fall increased the liquidity in the markets and drove prices higher," he said.
