MUMBAI: Indian shares were little changed on Wednesday as investors were reluctant to take fresh positions ahead of the U.S. Federal Reserve's policy statement due later in the day that is expected to give direction on interest rates there.
The Fed is expected to lay the groundwork for its first interest rate hike in nearly a decade, as it continues to weigh whether the U.S. recovery can hold up against collapsing oil prices and a soaring dollar.
Analysts say a rate hike by the Fed could force overseas investors to cut positions. Foreign investors were the backbone of the NSE index's record-setting rally last year, investing $16.1 billion. FIIs have invested $5.1 billion so far this year, exchange and regulatory data showed.
"The market is likely to trade range-bound. Strengthening of the US dollar is a concern and the Fed event will decide the future course for the time being. Nifty is likely to trade between 8,500 and 9,000 in the medium term," said Deven Choksey, managing director, KR Choksey Securities.
The benchmark BSE index was down 0.05 percent to 28,721.92 points, while the broader NSE index was down 0.09 percent to 8,714.45.
Metal and mining stocks were among the gainers, with Sesa Sterlite rising 2.3 percent after India's environment ministry lifted a ban in place since 2012 as part of a crackdown on illegal mining.
Reliance Industries added 0.8 percent after BNP Paribas upgraded the stock to "buy" from "hold" and increased the price target to 980 rupees.
However, Tata Motors fell 1.2 percent as its key unit Jaguar Land Rover reported lower-than-expected sales numbers for February.
Bharat Heavy Electricals Ltd was also trading 1.6 percent lower on reports that a state electricity board scrapped a key power project tender.