The Bombay Stock Exchange 30-share index shares see-sawed on Thursday with no clear direction as many markets in Asia were closed for holidays, but No. 2 mobile operator Reliance Communications climbed more than 1 percent on plans for a unit's IPO.
Traders said investors were cautious with global markets easing on worries the United States may be slipping into a recession, which would hurt export-focused companies.
By 10:14 a.m, the benchmark BSE 30-share index was up 0.21 per cent or 38.6 points at 18,178.05, with 20 components in gaining. It started higher but quickly turned negative, falling to a low of 18,056.88 in early deals.
"This is not a bounce back. The volatility is likely to remain in the near term, mostly due to uncertainty in global markets," said Chetan Shah, a senior portfolio manager, who helps manage funds worth 4 billion rupees at Religare Securities.
The index, which dropped 2.8 percent on Wednesday, is more than 14 percent below a record 21,206.77 hit on Jan. 10.
Shah said expectations the annual budget due by end-February would announce tax cuts were underpinning the market.
Shares in Reliance Communications rose 1.09 per cent to 689 rupees. The firm plans to list its tower unit Reliance Infratel after an initial public offer, which media reports suggest may raise up to $1.5 billion.
Top listed firm Reliance Industries rose 0.33 per cent to 2,560.55 rupees, as investors bet on robust growth of its exploration, production and refining businesses, traders said.
In the broader market 1,469 gainers lead 318 losers, but volume was at slightly over 60 million shares.
Markets in China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea and Taiwan are closed until next week for the Lunar New Year holidays.
Shares in some Indian outsourcers dropped after their peers in the United States fell broadly after network equipment maker Cisco Systems Inc and Electronic Data Systems Corp forecast weak earnings, citing economic reasons.
The software services exporters earn more than half their revenue from the United States. Top exporter Tata Consultancy Services down 0.8 per cent to 893.50 rupees and Wipro Ltd fell 0.5 percent to 423 rupees.
"The sentiment is still weak owing to the near-term uncertainty," brokerage India Infoline said in a client note.
"For retail investors it makes perfect sense to wait for some more time before taking a plunge," it said.
Depressed Indian markets forced property developer Emaar MGF Land Ltd to extend its initial public offer until Feb. 11 and lower its indicated price for a second time.
Wockhardt Hospitals Ltd, which extended its IPO by two days to Feb. 7, had received bids for only 10 percent of its 25.1 million share issue by Wednesday.
The 50-share NSE index was up 0.15 per cent at 5,330.35.
Elsewhere in the region, Karachi's 100-Share index was 0.3 per cent up at 14,060.44 points, while Colombo's All-Share index rose 0.68 percent to 2,454.36.