The consistent failure in holding the psychological 10,100 level on the Nifty indicated that the market may be preparing to cross previous record high of 10,137 (hit on August 2), experts said.
It was another day of consolidation for the market as equity benchmarks ended flat amid rising geopolitical tensions after North Korea launched another missile that flew over Japan.
The 30-share BSE Sensex was up 30.68 points at 32,272.61 and the 50-share NSE Nifty fell 1.20 points to 10,085.40.
The market managed to recover in last hour of trade as the Nifty clawed back above 10,100 level but failed to hold those gains.
The consolidation around this psychological 10,100 level indicated that the market may be preparing to cross previous record high of 10,137 (hit on August 2), experts said. The new high may be possible in second fortnight of this month, they feel.
"Global cues are currently dictating our market trend and it becomes difficult to trade in such scenario due to excessive volatility," Jayant Manglik, President, Retail Distribution, Religare Securities said.
He suggests preferring hedged positions and advises traders to stay with the performers like private banking, auto, metal and NBFC counters.
Nifty has support at 9950 now, he said.
"Continued FII selling and tightening monetary policies in US will curtail the easy liquidity, which is making investors cautious," Vinod Nair, Head of Research, Geojit Financial Services said.
On the global front, Asian markets closed mixed after North Korea launched a missile in the direction of the east, but the market reaction to the event was largely subdued. China's Shanghai Composite lost 0.5 percent while Japan's Nikkei gained half a percent. European markets were lower in trade, with France's CAC and Germany's DAX falling 0.1 percent each while Britain's FTSE lost over a percent post explosion in London.
Back home, the week was very strong for the market as the Sensex gained 1.8 percent and the Nifty rose 1.5 percent while Nifty Midcap rallied more than 2 percent.
Banks, FMCG and healthcare stocks saw selling pressure while technology stocks, and select auto & metals stocks gained strength.
The Nifty IT index outperformed all indexes, up 1 percent on buying in leading stocks. Infosys rallied 1.8 percent followed by TCS, HCL Technologies, Tech Mahindra and Wipro with around 0.7 percent loss.
Reliance Communications was down 5 percent after sources told CNBC-TV18 that Aircel is likely to file for bankruptcy under the Insolvency & Bankruptcy Code. The Aircel-RComm merger is unlikely to occur, sources said.
Banks stocks corrected after this news as Aircel's total debt stood at Rs 16,000 crore, including Rs 12,000 crore of India debt. As per RBI Norms, banks will have to provide 50 percent of Rs 6,000 crore by September 30. Lenders include SBI (down 0.7 percent), PNB (0.6 percent), BoB (0.4 percent) and J&K Bank (5.6 percent).
ONGC was biggest gainer among largecaps, up 4.6 percent, followed by Bajaj Auto and Coal India with 2-3 percent gains while ITC, IOC, IndusInd Bank, Aurobindo Pharma, Dr Reddy's Labs, Tata Power and ACC were down 1-2 percent.
BHEL fell 4 percent as UBS and Kotak retained sell rating on the stock despite bullet train contract.
The broader markets closed mixed as the BSE Midcap index lost 0.3 percent while Smallcap gained 0.4 percent. The market breadth remained negative as about 1,456 shares declined against 1,110 advancing shares on the BSE.
Graphite India was locked at 20 percent upper circuit and HEG rallied 10 percent, in addition to 6-9 percent gains in previous session after Jefferies initiated coverage on both stocks with buy rating.
Ujaas Energy surged 6 percent on bagging EPC order from Oil India for 500KW solar project.Max Financial was up 2.6 percent post block deal. Xenok and GS Mace were reportedly looking to sell 11.8 million shares at a floor price of Rs 595 per share today.