India May 16(IM): Indian shares pared earlier gains to end largely flat on Tuesday after the main opposition Congress party said it would form an alliance with the Janata Dal (Secular) party to rival Prime Minister Narendra Modis Bharatiya Janata Party (BJP) in the assembly elections in the southern state of Karnataka.
BJP looked set to win the largest number of seats in the assembly elections in the state, which would give Modi momentum for a re-election bid next year and open the path for more reforms, which investors view as a positive for markets.
The broader NSE Nifty closed down 0.04 percent at 10,801.85, while the benchmark BSE Sensex ended 0.04 percent lower at 35,543.94.
Earlier in the session, both indexes rose over 1 percent to hit their highest in more than three months.
Tata Motors Ltd led losses on both indexes, falling as much as 5.5 percent to its lowest in over 2 years, before ending 4.2 percent lower.