The Sensex, which had tumbled to two-month lows by losing 593 points in the past six sessions, recovered 29.63 points, or 0.16 per cent to 18,339 led by auto and FMCG sectors.
The index moved between 18,386.78 and 18,256.07 during trading. 13 stocks of the 30-share Sensex gained while 17 including Tata Power, TCS, Tata Steel and HDFC declined.
Brokers said buying at low levels in selective counters helped Sensex end in positive zone amid investors judging the recent losses as overdone.
Maruti led the gainers in Sensex with a 3.87 per cent rise, followed by Bharti Airtel. The telecom major shot up to three-month high by adding 2.89 per cent on reports that Credit Suisse has upgraded the stock to "outperform".
ITC, Bajaj Auto and M&M rose in 1.6-2.7 per cent range. Sectorally, the BSE Auto sector index gained the most by rising 1.04 per cent, followed by BSE FMCG index (0.87 per cent), BSE TECk (0.06 per cent and BSE realty (0.02 per cent).
"After initial volatility, the markets remained range bound for most of the day. While we had seen sharp declines toward the end of the last week, today any kind of fall was arrested by the strengthening of Rupee versus US dollar. The US dollar fell 0.4 per cent for the day," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Traders said the domestic stock market was helped by firming Asian trends and higher opening in Europe on reports that US President Barack Obama has signalled confidence of striking a deal with Congress on a new budget.
However, the 50-share National Stock Exchange index Nifty eased by 2.65 points to settle at 5,571.40.
Markets @ 11.30 AM (Reuters)
The Sensex and the Nifty are trading flat, after both indexes fell in each of the previous six sessions.
Traders remain cautious ahead of the winter session of parliament set to start on Thursday. The government's will to pass reforms is considered critical to revive stock markets that have faltered over the past month and a half.
Rate-sensitive stocks fall on worries that last week's data showing easing inflation is unlikely to result in a repo rate cut this year.
HDFC is down 0.7 percent, while Axis Bank falls 1.1 percent.
However, telecom stocks extend a recent rally after last week's auction of 2G spectrum fetched lower prices than the government had targeted.
Bharti Airtel gains 2.4 percent, after surging 9.3 percent last week.
Markets @ 09.00 AM (PTI)
Snapping a six-session long losing streak, the BSE benchmark index Sensex today recovered by over 56 points in early trade on the back of fresh buying by funds and retail investors amid a firm trend in Asian markets.
The 30-share barometer rose by 56.22 points, or 0.30 per cent, to 18,365.59 with stocks of realty, capital goods, IT and auto sectors leading the recovery. The index lost almost 593 points in the past six sessions.
The wide-based National Stock Exchange index Nifty moved up by 10.25 points, or 0.18 per cent, to 5,584.30.
Brokers said the trading sentiment turned slightly better on selective buying by funds and retail investors, tracking a firm trend in Asian markets.
In Asia, Hong Kong's Hang Seng rose by 0.24 per cent, while the Japan's Nikkei by 1.33 per cent in early trade.
The US Dow Jones Industrial Average had ended 0.23 per cent higher in previous session on Friday.