Indian shares were little changed on Tuesday, pulled lower by metal stocks after Morgan Stanley cut ratings on a few resource-based companies, while large-cap stocks offset the losses.
Investors are also cautious ahead of the expiry of futures and options (F&O) contracts on Thursday and the release of India's gross domestic product data for the September quarter on Friday.
Sentiment was also muted in Asia after U.S. President Donald Trump seemed to quash hopes of a trade truce with China, clouding what had been a bright start to the week. Oil markets also remained cautious.
"Market stays in a tight range, investors wouldn't feel comfortable about results of the past quarter given the volatility of the earnings," said Deven Choksey, founder, KR Choksey Investment Managers.
The Nifty was down 0.01 percent at 10,627.45 as of 0540 GMT.
The benchmark Sensex was 0.05 percent higher at 35,373.39.
The flattish move mirrors that of the choppy trade seen initially on Monday, but markets swung to positive territory in the last two hours.
"Volatility increased in the F&O market yesterday and that's a cause for worry. Volatility is significantly increasing in the monthly settlement along with the open interest," Choksey added.
India's volatility index, a measure of stock market volatility, fell as much as 18.6 percent on Tuesday, but pared most losses and was last lower by 7 percent.
Metal stocks pulled the Nifty lower, with the Nifty metal index down as much as 2.1 percent. It has fallen 19.5 percent so far this year, contrary to its jump of over 40 percent in each of the past two years.
JSW Steel Ltd plunged 4.6 percent after Morgan Stanley cut its rating on the stock to 'underweight' from 'equalweight'. Profitability of Indian steel companies is at decade-high, the brokerage added.
Sun Pharmaceutical Industries was the top drag on the index, falling over 7 percent. Other drugmakers followed suit, with the Nifty pharma index down 1.8 percent.
Still, sentiment was supported by gains in large-cap stocks such as Infosys Ltd, Reliance Industries Ltd and HDFC Bank Ltd.