The Sensex and Nifty gained marginally ahead of the outcome of Karnataka assembly elections as early gains were undone by a sell-off by market participants, while disappointing macroeconomic data added to the cautious sentiment. The Sensex rose about 21 points to close at 35,556.71, while Nifty was up 0.10 points to settle at 10,806.60. 

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Results of the Karnataka elections will be declared tomorrow, with most exit polls indicating a tight race between the ruling Congress and the BJP.

At the macro front, inflation at the wholesale level rose to 3.18 per cent in April on increasing prices of fuel and food items. The data came in during market hours today. Industrial output growth, meanwhile,  fell to a five-month low of 4.4 per cent in March due to a decline in capital goods production and deceleration in mining activity and power generation, according to official data released after market hours on Friday.

"Markets traded rangebound and ended on flat note, tracking mixed cues. Initially, firm global cues triggered positive start but contraction in IIP data capped upside as the session progressed. Besides, exit poll figures of Karnataka election showed mixed trend and that elevated anxiety among the participants. Markets will react to the outcome of Karnataka elections and the immediate reaction would be on the downside in case of hung assembly. We reiterate our view to let the markets stabilise first after the results and maintain hedged positions in the meanwhile," said Jayant Manglik, President, Religare Broking.  

The major gainers on the BSE were NTPC, Dr Reddy's Lab, IndusInd Bank, State Bank of India and Hero MotoCorp, while Mahindra and Mahindra, Tata Motors (DVR), Tata Motors, Yes Bank and Bharti Airtel were the major losers.

On the NSE, the top gainers were NTPC, BPCL and IndusInd Bank. The major losers were Titan, Zee Entertainment and Tata Motors. 

Among individual stocks, Sun TV Network rose as much as 11.7 per cent after posting a 23 per cent jump in quarterly profit. 

Pharmaceutical stocks saw some recovery after the index shed 5.8 per cent in the last six sessions. Sun Pharmaceutical Industries, the top gainer in the index, was up 2.5 per cent.

Among the decliners, Allahabad Bank and UCO Bank fell between 3.7 per cent and 5 per cent while Dena Bank slumped as much as 12.7 per cent. 

Meanwhile, domestic institutional investors (DIIs) bought shares worth a net Rs 1,163.35 crore, while foreign portfolio investors (FPIs) sold shares to the tune of Rs 325.44 crore on Friday, as per provisional data.