In early trade, the benchmark declined 169.93 points or 0.20 per cent to a low of 80,883.26. Later, it bounced back 178.3 points or 0.21 per cent to hit a high of 81,231.49 but gave up gains towards the end.
The NSE Nifty edged up 11.65 points or 0.05 per cent to close at 24,823.15 registering gains for the seventh session in a row.
From the Sensex pack, Tata Motors, Sun Pharmaceutical, Bharti Airtel, Bajaj Finserv, ICICI Bank, Mahindra & Mahindra and JSW Steel were the gainers.
Tech Mahindra, HCL Technologies, Asian Paints, Titan, Infosys, State Bank of India, Tata Consultancy Services and HDFC Bank were the laggards.
"Ahead of the FED chair Powell's speech, the Indian indices oscillated around the flat trajectory and mixed global market sentiments further catalysed this scenario," Vinod Nair, Head of Research, Geojit Financial Services said.
Investors are exercising caution and awaiting Powell's signals for more insights on the interest rate path, Nair added.
In the broader market, the BSE smallcap gauge jumped 0.15 per cent, however the midcap index fell 0.66 per cent.
Among the indices, Services surged by 1.07 per cent, Auto by 0.93 per cent, Industrials by 0.26 per cent, capital goods by 0.23 per cent and Consumer Discretionary by 0.13 per cent.
Realty, IT, Oil & Gas and Teck were among the laggards.
"Indian market struggled for direction in early trade on Friday as investors awaited cues from US Federal Reserve Jerome Powell's speech at the ongoing Jackson Hole Economic Symposium.
"Markets are looking for new clues on the timing and pace of possible interest rate cuts by the Fed this year," Avdhut Bagkar Technical and Derivatives Analyst at StoxBox.
Bajaj Auto stock jumped 5 per cent after the company became the first automotive original equipment manufacturer (OEM) to receive a domestic value addition certificate for all 15 electric models it submitted for clearance from the Ministry of Heavy Industries (MHI).
Stock of Anil Ambani led group stocks tumbled by up to 10 per cent after Sebi barred him and 24 other entities, including former key officials of RHFL, from the securities market for five years for diversion of funds from the company.
European markets were trading with significant gains in the mid-session deals while Asian markets were mixed.
The US stock markets closed lower in overnight trade on Thursday.
Foreign Institutional Investors (FIIs) bought equities worth Rs 1,371.79 crore on Thursday, according to exchange data. Domestic institutional investors (DIIs) again bought equities worth Rs 2,971.80 crore on Thursday.
Global oil benchmark Brent crude rose 1.01 per cent to USD 78 a barrel.
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