The BSE Sensex and Nifty traded flat in a rangebound trade in the afternoon session as gains in infrastructure stocks such as Larsen & Toubro and Bhel were offset by falls in technology stocks while banks declined on profit-taking.
Gains were also capped on weak cues across global markets after Switzerland's unexpected move to abandon its currency cap jolted markets already roiled by plunging commodities prices.
Broader sentiment remained positive with overseas investors buying Indian index futures and options worth Rs 7,496 crore and cash shares worth Rs 1,738 crore after the Reserve Bank of India unexpectedly cut rates by 25 basis points on Thursday.
"Markets took a steep jump yesterday and it's settling down. Macro environment has already showing the direction. It will take some more time for individual companies to start perform. But the sentiment is bullish and people want to buy into this market," said Deven Choksey, managing director, KR Choksey Securities.
As of 1.12 p.m. the benchmark Sensex was up 0.16 per cent at 28,121.14, while the broader Nifty gained 14.65 points to 8,508.80.
Infrastructure shares gained with Larsen & Toubro adding nearly 2 per cent as the rate cut is expected to lower borrowing costs and help growth. Bharat Heavy Electricals gained 1.25 per cent.
However, technology stocks fell with Tata Consultancy Services down 0.75 per cent after the company's December-quarter revenue growth lagged estimates.
Among other losers, banking stocks dropped on profit-taking after spectacular gains in the previous session.
State Bank of India was down 2 per cent after gaining 5.1 per cent in the previous session and Punjab Nation Bank was lower 2.07 per cent after adding 3.45 per cent on Thursday.
However, Axis Bank shares were up 0.33 per cent after it reported in-line earnings for the October-December quarter today.