The 30-share index BSE Sensex closed the week on a flat note on May 25, as state-controlled oil firms dropped on worries this week's petrol price increase would be partly rolled back, casting questions about a potential augmentation in other fuels like diesel.

The Sensex surged 0.4% for the week, snapping four successive weeks of losses, as investors witnessed the recent sharp sell-down as overdone, but the viewpoint stays deeply cautious.

Indian shares are still down 6.4% thus far in the month of May, as the Greek and the euro zone sufferings and concerns regarding policy paralysis and fiscal challenges at home have hit markets and sent the Indian currency to a string of all-time lows versus the US currency.

Foreign investors remained tha net sellers of Rs 3.87 billion thus far during the month of May.

Jigar Shah, senior vice president at Kim Eng Securities stated, “Rupee has been an annoying factor for the foreign investors. Until it stabilizes, people will not commit any money.”

"The outcome of Greece is also uncertain as of now. Overall, there are far more irritants for the markets investors," he added, "even though the markets are not expensive and oversold."

The Sensex closed the week on a flat note at 16,217.82, whereas the broad-based Nifty also shut the week on a flat note at 4,920.40.

Few analysts witness any short-term catalysts for the Indian bourses unless worldwide risk aversion wanes in the euro zone or the administration declares ket fiscal consolidation steps, both of which are witnessed as doubtful in the short-run.

Analysts at Goldman Sachs and Bank of America-Merrill Lynch slashed their financial 2012-13 growth projections for the country on May 25, with Goldman citing plan in force as one of its major reasons.

Investors had initially cheered the administration’s declaration on Wednesday to permit state oil firms to lift up petrol rates, witnessing it as a small gesture towards fiscal consolidation.

Oil scrips Hindustan Petroleum Corporation declined 2.1%, whereas Indian Oil Corporation dropped 1.6%.

Among other losers ITC lost 0.6%, Maruti Suzuki India and Mahindra & Mahindra shed 2.2% each.

But, among gainers, steel firms gained on speculation the administration would meet with them on 1st June to discuss an increase in long steel products.

Tata Steel shares surged 2.5%, whereas JSW Steel zoomed 2%.