India's stock markets were little changed in choppy trade on Thursday as short-covering tied to the expiry of derivatives later in the session lifted some shares while broader gains were capped after the U.S. Federal Reserve kept open the prospect of more rate hikes this year.
The Fed kept interest rates unchanged on Wednesday and said it was "closely monitoring" global economic and financial developments, signalling it had accounted for a stock market selloff but wasn't ready to abandon a plan to tighten monetary policy this year.
Equity markets back home were slightly volatile as investors churned their positions on the last day of the January derivative contracts and ahead of the February futures and options series that begins on Friday.
"Some amount of short covering-led buying has happened due to derivatives' expiry," said Deven Choksey, managing director at KR Choksey Securities.
The broader Nifty was 0.2 percent higher after falling as much as 0.38 percent earlier in the session.
The benchmark BSE Sensex rose 0.18 percent.
Both indexes were on track to post their highest close since Jan. 14.
Gains were led by blue-chip stocks. ITC (ITC.NS) gained 2.2 percent, Reliance Industries (RELI.NS) rose 1.3 percent and Hindustan Unilever HUL.NS surged 3.5 percent.
Shares in Housing Development Finance Corp (HDFC.NS) were down 1.4 percent after the company's December-quarter profit fell short of street estimates.
ICICI Bank (ICBK.NS) fell 1.6 percent and Bharti Airtel (BRTI.NS) dropped 1.6 percent ahead of their quarterly results later in the day.
Dabur India (DABU.NS) rose 2 percent as the company reported a slight increase in its quarterly profit and margins although its volume growth was worse-than-expected.
(Reporting by Karen Rebelo in Mumbai; Editing by Subhranshu Sahu)