Benchmark indices opened marginally higher but trimmed most of the gains later as traders turned cautious and booked profits at higher levels.
At 9:40AM, the 30-share Sensex was up 31 points at 28,594 and the 50-share Nifty was up 9 points at 8,573.
Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 474 crore on Thursday, as per provisional stock exchange data.
Despite losing around 0.2% Nikkei index has remained near 7-1/2 year highs on Friday as optimism on the U.S. economy helped investors shrug off a delay to hoped-for eurozone easing.
Hopes of stimulus measures from Chinese authorities have lifted Chinese stocks. Shanghai Composite and Hang Seng indices have gained 0.3% and 0.5% each
Overnight, US markets ended marginally lower after a volatile day of trading. Caution ahead of the release of US nonfarm payrolls data and losses in energy shares dragged the markets. Sentiments were also dampened on European Central Bank’s decision to defer monetary stimulus measures till 2015 without any specific timelines. Dow Jones ended flat while S&P 500 and Nasdaq indices closed lower by 0.1% each.
All sectoral indices except IT were in the green in early trades led by BSE Capital Goods up 0.6% followed by Consumer Durables, Metal, FMCG, Oil and Gas among others.
Index heavyweights Reliance Industries and ITC were up 0.6% contributing the most to gains on the Sensex.
BHEL was up 1.4% after the company commissioned the sixth unit of 412 MW Rampur hydel power project in Himachal Pradesh. L&T was up 0.6%. The state-owned equipment maker has now completed commissioning all the six units — each having 68.67 MW generation capacity — of the plant, operated by SJVN Ltd.The project is located on the Satluj river.
ICICI Bank, HDFC, M&M, Bharti Airtel and ONGC were among the other Sensex gainers.
Among IT majors TCS and Wipro were down 0.4% each.
SAIL was down 1.6% as the government will kick-start its divestment process by selling its stake in the steel major. The floor price for disinvestment in Steel Authority of India Limited (SAIL) will be set at Rs 83 a share, slightly lower than its closing price of Rs 83.35 on the BSE on Thursday, according to an exchange filing.
In the broader market, the BSE Mid-cap and Small-cap indices were 0.4-0.7% each.
Market breadth was positive with 1,102 gainers and 468 losers on the BSE.