"Trade is likely to be range bound between 5,480 and 5,630. Some cool off looks possible for a session or two," independent analyst Sarvendra Srivastava said.
At 09.25 a.m., the Sensex traded 18 points or 0.1 per cent higher at 18,560 while the Nifty was virtually unchanged at 5,610. The rupee, however, slipped to 54.23 to the dollar tracking weakness in the euro.
Banking and metal stocks saw some profit booking, but most other sectoral indices saw buying interest. On the Nifty, 28 of the 50 stocks traded in the green.
Heavy equipment manufacturer BHEL led the gains on the Nifty, rising 2.3 per cent. The stock is recovering after a sharp selloff that has sent prices lower by 20 per cent over the last six months.
Private steel maker, which has also witnessed a sharp selloff, extended gains, rising 1.6 per cent. PSU lender PNB gained 1.6 per cent.
IT major Infosys jumped 1.4 per cent after an upgrade by BofAML. Mobile carrier Bharti Airtel was the other stock to gain over 1 per cent on the Nifty.
Among the losers, aluminium maker Hindalco dropped 1.5 per cent. TCS, India's biggest IT services outsourcer fell 1.3 per cent after it told analysts that margins might grow at a slower pace in the September quarter.
Kingfisher Airlines extended gains, rising 5 per cent on hopes of investment after the government allowed foreign airlines to invest in domestic carriers. However, SpiceJet shares fell 2.5 per cent.
Asian shares retreated from four-month highs as markets calculated the impact on growth from the Federal Reserve's aggressive stimulus and eyed whether Spain will request a bailout to ease its fiscal strains. Concerns about the growth slowdown in China, the world's top consumer of raw materials and the second-largest economy, also weighed on sentiment as investors took profits from last week's rallies.
European shares slipped from 14-month highs on Monday as traders booked profits while U.S. stocks also paused after surging nearly five-year highs last week.
With inputs from Thomson Reuters