Sensex closes flat; Bharti, Sun Pharma top buy list

Indian shares closed flat after moving in a narrow range throughout the session on Monday. The rally of 400 points in previous two sessions indicated that the market already priced in the news of ECB's new unlimited bond buying programme. Now investors awaited for major events - locally one is inflation for August on Friday and another is industrial output for July, which will decide the move of RBI in its policy meet that scheduled for September 17.

The 30-share BSE Sensex gained 17.13 points to close at 17,766.78. Meanwhile, the 50-share NSE Nifty rose 4.75 points to 5,363.45.

Asian and European markets too were lacklustre in trade today ahead of major events this week - Federal Reserve policy meet on September 12-13 and German's Constitutional Court ruling (that decides on the legality of the ESM) on Wednesday.

Expectations mounted for another economic stimulus from the Federal Reserve after disappointed employment report, but the markets are still not sure about the stimulus. Other events are Dutch elections and the troika meet in Greece.

Back home, telecom operator Bharti Airtel shot up 2.3 and drug producer Sun Pharma gained 2.6%.

Housing finance company HDFC, aluminium major Hindalco Industries, two-wheeler maker Bajaj Auto and top commercial vehicle maker Tata Motors were up more than 1%.

Tata Steel, the world's sixth largest steel producer and Coal India, country's largest coal mining company moved up over 1.6%.

Software services exporter Infosys bounced back again in late trade, rising 0.6%. The company has bought Zurich-based Lodestone Holding AG for 330 million Swiss franc today.

India's largest lender State Bank of India tanked 1.8% while its rival ICICI Bank was down 0.7%. State-owned power equipment manufacturer BHEL tumbled 2% on concerns over its order book.

Shares of Jindal Steel lost more than 2%. Index heavyweight Reliance Industries, top IT services exporter TCS and FMCG major Hindustan Unilever were down 0.5-0.9%.

The broader markets outperformed benchmarks; the BSE Midcap Index was up 0.3% and Smallcap rose 0.7%.

Advancing shares outnumbered declining by 1481 to 1292 on the Bombay Stock Exchange.