Key benchmark indices closed the last day of the year 2012 on a flat note since domestic investors remained cautious over US policy makers failing to reach an agreement over the weekend to avert the fiscal cliff and saw the BSE benchmark rose by 26 per cent — the best annual gain since 2009.

The day began with a bout of volatility witnessed in the early trade as key indices alternately swung between gains and losses. 

Index heavyweight Reliance Industries (RIL) edged lower, while another index heavyweight ITC also declined. Realty stocks edged higher on renewed buying, while IT stocks were mostly lower as US policy makers failed to reach an agreement over the weekend to avert the fiscal cliff issue.  But HDFC Bank scrip rose after the private sector bank lowered its base rate.

The barometer index of the Bombay Stock Exchange (BSE) closed the day with a loss of 18.13 point or 0.09 per cent to 19,426.71 points, while the 50-unit S&P CNF Nifty on National Stock Exchange (NSE) settled at 5,905.10, which is a slump of 3.36 points or 0.06 percent.

However, both the popular indices of BSE and NSE gained over 25 per cent each in 2012. While the Sensex gained 25.7 percent, Nifty up 27.7 per cent respectively in this calendar period.

Commenting on the market, Kotak Securities' Shrikant Chouhan said:  “Today, our markets remained almost unchanged on the back of outcome to come on Fiscal cliff from United States.

Even though the broader market activity was very thin, few mid cap stocks along with PSU banks performed better than expectations.  ....On monthly chart of Nifty and Sensex, the market has formed Doji formation which is a sign of abnormal activity to come in the coming month.

In 30-share BSE index, 17 stocks gained, while 13 closed with losses led by ITC, L&T, HDFC, ICICI Bank and TCS. RIL, Bharti Airtel and Maruti Suzuki also closed lower.

The market, however, received some support from gainers, including Tata Motors, HUL, ONGC, M&M and GAIL.

There was limited participation on the last trading session of 2012 as most Foreign Institutional Investors (FIIs) were off the market, brokers added.

On a calendar year basis, the Sensex clocked 25.69 per cent gain, or 3,971.79 points, in 2012. This gain, the best since 2009 when the index had gained a whopping 81.03 per cent, came on the back of strong capital inflows and big-bang reforms by the government. The Nifty rose by 1,280.80 points or 27.70 per cent in 2012.

Investors got richer by almost Rs 16.09 lakh crore in 2012, with their wealth soaring to Rs 69,21,815 crore from last year’s wealth of Rs 53,12,875 crore.

FIIs bought shares worth a net Rs 833.40 crore last Friday as per provisional data from the stock exchanges. They have infused Rs 1,27,455.30 crore ($24.20 billion) in 2012 till December 27, as per Sebi data.

Globally, Asian markets today ended mixed while European stocks were trading sideways on continued concern about the upcoming US fiscal cliff. In India, 13 out of 30 Sensex-based scrips settled lower while 16 settled higher.

Infosys closed unchanged.ITC declined by 0.88 per cent, followed by L&T (0.76 pc), Maruti Suzuki (0.75 pc), Cipla (0.55 pc) and HDFC (0.53 pc). Among gainers, Tata Power rose by 1.19 per cent, followe by GAIL (0.98 pc), Hindalco (0.89 pc), Tata Motors (0.89 pc), and Wipro (0.79 pc).

“Auto sector stocks like M&M and TataMotors were up on news of rate cuts from some of the banks which shall lead to cheaper loans and increased sales. PNB and ONGC were the other major gainers, while profit-booking in ITC, L&T and RIL among others kept the index under pressure,” said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.