Sensex ends flat in volatile session

MUMBAI, May 26 (Reuters): The BSE Sensex ended flat on Monday in a volatile session, giving up earlier gains of nearly 2 per cent due to profit-taking in blue-chips such as IDFC while caution ahead of Narendra Modi's ministerial appointments also weighed.
Selling pressure was broad-based as mid-cap shares saw steep falls. The NSE Midcap index ended down 2 per cent, after earlier surging as much as 2.1 per cent to hit a record high at 10,673.75.
Hopes of an economic revival by the incoming Modi-led government have helped maintain the BSE Sensex as the best performing equity index in Asia for 2014 with 23.4 per cent returns compared to Pakistan's 22.1 per cent and Indonesia's 21.7 per cent.
Investors are awaiting the composition of Modi's cabinet, allocation of portfolios to the prime minister's office, and his choice for finance minister, widely expected to be front-runner Arun Jaitley.
"In the short term there would be some consolidation. Expansion of price-to-earnings has happened, now corporate profit growth is on watch," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.
"The outlook is improving with Modi being there. I hope all important ministerial positions remain with the Bharatiya Janata Party," Srivastava added.
The benchmark BSE Sensex ended up 0.1 per cent, or 23.53 points, at 24,716.88, after earlier rising as much as 1.95 per cent.
The broader Nifty lost 0.1 per cent, or 8.05 points, to end at 7,359.05, after rising as much as 1.9 per cent during the day.
Among blue-chips, IDFC fell 4.7 per cent while Tata Power Co ended 4.2 per cent lower.
DLF fell 5.9 per cent while Bharat Heavy Electricals lost 4.8 per cent.
State Bank of India (SBI) fell 1.9 per cent as investors pared positions after last Friday's 9.6 per cent jump.
Heavy outperformance since mid-March and investors' inclination for reducing perceived volatility in portfolios is leading to paring of positions in mid-cap stocks, dealers said.
Ramco Cements Ltd slumped 6.5 per cent, Oriental Bank of Commerce declined 5.8 per cent, while Jain Irrigation Systems lost 4.9 per cent.
Divi's Laboratories Ltd slumped 4.1 per cent, recording its biggest single-day fall since September 3, 2013, after the company's January-March net profit rose 6 per cent to 1.9 billion rupees, lagging some analysts estimates.
However, among stocks that gained, Sun Pharmaceutical Industries Ltd rose 1.2 per cent and Ranbaxy Laboratories Ltd ended up 0.4 per cent after a court lifted a temporary stay it imposed on the on completion of the companies' $3.2 billion merger.