Sensex takes a breather; HDFC falls on profit-booking

Indian shares were largely flat on Wednesday, hovering near their highest level in 18 months, as investors booked profit in recent outperformers such as Housing Development Finance Corp Ltd.

Overall sentiment remained buoyant after surprisingly weak US services sector activity bolstered views the US Federal Reserve will refrain from raising interest rates at its policy meeting this month.

Reflecting the optimism, Asian stocks rose to one-year highs on Wednesday, while Wall Street closed higher overnight.

Foreign investors have been buying into Indian shares as part of a shift to higher-yielding emerging markets, bringing the total net investments in the year to $6.09 billion.

"Indian markets will continue to benefit from this liquidity-driven rally as fundamentals have improved. Global funds are pouring in money in good quality stocks for a long term, so the trend remains positive," said Ashu Madan, president of equity broking at Religare Securities.

The benchmark BSE Sensex was 0.07 percent lower at 28,956.77 as of 0535 GMT, while the broader NSE Nifty was up 0.05 percent at 8,947.30.

Earlier in the session, the BSE index hit its highest since April 15, 2015 while the NSE index rose to its strongest level since March 4, 2015.

Among the decliners, engineering company Bharat Heavy Electricals Ltd fell 2.2 percent ahead of its June-quarter results later in the day.

Housing Development Finance Corp dropped 1.7 percent after the mortgage lender gained 7.4 percent in the last seven straight sessions, while Asian Paints Ltd declined 1.6 percent after adding 4 percent in the last two sessions.

Telecom firms Idea Cellular Ltd and Bharti Airtel Ltd were down about 1 percent each. They fell 10.5 and 6.3 percent, respectively, on Thursday after Reliance Industries announced its foray into the telecom sector, before recovering over the next two sessions.

Meanwhile, mining and energy group Vedanta Ltd rose 1.2 percent while oil producer Cairn India Ltd gained 1 percent after shareholders of parent company Vedanta Resources approved Vedanta's takeover of subsidiary Cairn India.

Oil India Ltd hit its highest level since January 6 and was last up 1.6 percent after June-quarter results came in line with expectations.