Indian shares erased early losses and ended higher on Friday as some consumer goods firms expected to benefit from the launch of a unified goods and services tax gained, offsetting declines in sectors such as autos that would be hit. But the indexes still posted their first monthly loss this year as a record-setting rally cooled.
The broader NSE index closed up 0.18 percent at 9,520.90, but lost 1.04 percent for the month.
It declined 0.56 percent this week, its third consecutive weekly loss.
The benchmark BSE index ended 0.21 percent higher at 30,921.61 but posted a weekly loss of 0.70 percent and a monthly loss of 0.72 percent.
The revised tax structure will kick in from midnight Friday, marking India's biggest tax reform since independence, unifying its $2 trillion economy and 1.3 billion people into a common market.
Weakness in Asian peers following losses on Wall Street overnight also hurt sentiment. The MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.7 percent.
"There is some kind of profit-booking and sideways consolidation in the market, so most sectors are volatile," said Siddharth Sedani, head and vice president, equity advisory at Anand Rathi.
Auto makers were among the top losers on worries that GST would push up prices of cars and lead to a decline in sales.
The Nifty Auto index lost as much as 0.9 percent, with Tata Motors Ltd falling as much as 1.6 percent.
IndiGo owner InterGlobe Aviation Ltd slid as much as 5.7 percent after falling 2.2 percent on Thursday after the company expressed interest in buying a stake in Air India after the government approved plans to privatise the debt-laden state-owned carrier.
Central Depository Services (India) Ltd surged as much as 80 percent on its trading debut, after raising 5.2 billion rupees ($80.43 million) in the country's most heavily over-subscribed initial public offering this year.
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