Further, global ratings agency Standard & Poor's report on India's sovereign credit worthiness also weighed on sentiment.
Standard and Poor’s on Monday said the government must deliver on its reform promises, as low income levels and weak fiscal indicators were constraining the sovereign’s credit worthiness compared to its peers.
The 30-share Sensex ended higher by 30 points at 29,004.66 and the 50-share Nifty gained 7 points at 8,762.10.
However, the broader markets underperformed the benchmark indices- BSE Midcap index dipped 0.2% whereas BSE Smallcap index fell nearly 1%.
Market breadth in BSE remained negative with 1,715 declines against 1,162 advances.
Furthermore, foreign portfolio investors (FPIs) bought shares worth a net Rs 601.91 crore yesterday, as per provisional data released by the stock exchanges.
Domestic institutional investors (DIIs) sold shares worth a net Rs 163.79 crore yesterday, as per provisional data.
In the currency front, the Indian rupee was tad stronger at 62.30 per dollar versus Monday's close of 62.32/33, tracking Asian peers and local shares.
Budget 2015: Complete Coverage
GLOBAL MARKETS
World shares held near all-time highs on Tuesday on relief that Greece had submitted reform plans and the dollar was firmer on expectations that Fed chair Janet Yellen would keep the bank nudging towards US rate hikes.
European bourses traded around breakeven as Greece delivered a list of economic reforms to the euro zone that it hopes will secure a four-month extension of its financial lifeline.
Greek shares jumped as much as 7% and Greek, Italian and Spanish bond yields all nudged lower as the latest bout of euro zone break-up jitters eased.
Asian share markets had also crept higher overnight as Tokyo scored another 15-year peak and MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.16%.
STOCKS IN ACTION
BSE Capital Goods and FMCG indices gained over 1%. However, BSE Oil & Gas and Metal indices were down over 1% each.
From the FMCG space, ITC Hotels, India's second largest hotel chain, gained over 1% to Rs 3958 on the BSE after it won the bid to acquire Park Hyatt Hotel property in Goa owned by Blue Coast Hotels that had been put up for public auction by IFCI. HUL rose over 3%.
Capital Goods majors like BHEL and L&T gained nearly 1.7-2.1% each. Capital Goods shares ended positive on hopes of concession to the infra sector in the upcoming Union Budget.
Car market leader Maruti Suzuki gained over 1% after the company launched refreshed version of its popular compact sedan Dzire with introductory prices ranging from Rs 5.07 lakh to Rs 7.81 lakh (ex-showroom Delhi).
Other notable gainers were Cipla, GAIL, Wipro, Coal India, TCS, Axis Bank and ICICI Bank.
On the losing side, shares of oil and gas companies were under pressure with the Oil and Natural Gas Corporation (ONGC) hitting 11-month low on the BSE today.
ONGC dipped 3% to Rs 313, its lowest level since March 2014, on BSE. Cairn India too slipped 3.3% at Rs 241, while Oil India down 2% at Rs 478 and Reliance Industries by 1.1%.
Other prominent losers included Sesa Sterlite, Tata Steel, Tata Motors, Bharti Airtel and Hindalco.
Among other shares, TVS Motor Company slipped 7% to Rs 270, extending its previous day’s 2.4% fall on NSE, after Venu Srinivasan, chairman and managing director of the company sold 1.5 million shares for about Rs 45 crore.
Hindustan Oil Exploration Company (HOECL) zoomed 17% to Rs 47 on National Stock Exchange (NSE) on back of heavy volumes.
Shares of companies related to railways sector fell by up to 11% on the bourses on profit booking.
Kalindee Rail Nirman, Texmaco Rail & Engineering, Titagarh Wagons, Stone India and Cimmco were down 4-12% on the BSE.