Markets opened the day higher on hopes that the FDI motion moved by the opposition would be defeated, after Mayawati led BSP promised to vote with the government.
The Sensex gained 31 points, while the Nifty rose 7 points at 9.30 am IST. Among the early gainers in trade were Tata Power, Jindal Steel, Bhel, Wipro and Sesa Goa.
Nifty stocks that lost ground in early trade were HCL Tech, Gail and Dr Reddy's Laboratories. Heavyweight, Reliance Industries was trading marginally lower after reports that the company is planning to shut a crude distillation unit and a secondary unit for planned maintenance.
Shares of ONGC was down despite reports that the company has pipped China National Petroleum Corp to bag ConocoPhillips' stake in Kazakhstan's giant Kashagan oilfield.
Software stocks continued to trade lower with HCL Tech, Infosys and TCS amongst the losers on continued worries on growth outlook for the software sector.
Other stocks that lost ground from the Nifty were Dr Reddy's, Asian Paints, Hindustan Unilever and Grasim.
Banking and financial stocks too were subdued with HDFC, Axis Bank and HDFC Bank losing ground in early trade.
Meanwhile, markets in Asia were trading higher on increasing hopes of a sharp recovery in China and solution to the impending fiscal cliff crisis in the US.
Indian markets are expected to be volatile ahead of voting for FDI in multibrand retail in the Rajya Sabha.