Equity benchmarks recouped intra-day losses to end on a flat note on Wednesday as profit booking in banking and finance counters offset robust demand for metal and energy stocks.

Snapping its two-session rising streak, the 30-share BSE Sensex ended 28.73 points or 0.05 per cent lower at 54,525.93. The broader NSE Nifty inched up 2.15 points or 0.01 per cent to 16,282.25.

Midcap and smallcap stocks saw heavy selling following BSE's new surveillance measure for the segment. However, the counters stabilised after the exchange clarified the additional price limits would be applicable only to certain stocks having a market capitalisation of less than Rs 1,000 crore.

Tata Steel was the top gainer in the Sensex pack, jumping 3.86 per cent, followed by NTPC, PowerGrid, Reliance Industries, Bajaj Finserv, and IndusInd Bank.

On the other hand, Bajaj Auto, Sun Pharma, Kotak Bank, ICICI Bank, M&M, Nestle India and HDFC Bank were among the laggards, shedding up to 1.84 per cent.

"Following continued selling in broader markets and weak Asian and US peers, Indian indices shed their early gains. However, late recovery helped the market to close the day on a flat note," said Vinod Nair, Head of Research at Geojit Financial Services.

Measures taken by BSE to curb excessive price movement in smaller stocks triggered selling pressure in small and mid-cap counters, while clarity from BSE on limiting its restrictions to penny stocks gave some relief, he noted.

"Mainstream sectors succumbed to profit-booking while metal, energy, and infra sectors traded against the trend," Nair added.

Binod Modi, Head - Strategy at Reliance Securities, said, "Metal stocks were in focus today as the passage of the $1 trillion infrastructure bill by the Senate in the USA lifted sentiment about global demand. Notably, pharma followed by financials, auto and consumers witnessed heavy selling pressure, while volatility index soared by 1 per cent."

Sectorally, BSE metal, power, energy, oil and gas, basic materials, and utilities indices rose as much as 3.15 per cent, while healthcare, bankex, auto and telecom closed lower.

Broader BSE midcap and smallcap indices lost up to 0.83 per cent.

Global equities were mixed as optimism over the passage of the $1 trillion infrastructure bill in the US was tempered by rising Delta variant cases in multiple countries.

In Asia, bourses in Shanghai, Hong Kong, and Tokyo ended with gains, while Seoul was in the red.

Equities in Europe were in the green in afternoon trade.

Meanwhile, international oil benchmark Brent crude rose 0.16 per cent to $70.74 per barrel.

The Indian rupee settled just 1 paisa lower at 74.44 against the US dollar on Wednesday amid a strong greenback overseas.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 178.51 crore, as per exchange data.