India's Nifty 50 and Sensex were muted on Wednesday, as investors remained on the sidelines ahead of earnings and key inflation readings which could influence the interest rate outlook.

The blue-chip NSE Nifty 50 was little changed at 21,531.60 points as of 11:12 a.m. IST, while the S&P BSE Sensex shed 0.01% to 71,380.16.

Indian stocks are priced to perfection and any earnings disappointment could have an exaggerated impact on shares, said Dipan Mehta, director at Elixir Equities.

IT stocks were up 0.5%. The top two companies TCS and Infosys are due to report quarterly results on Thursday, kicking off the earnings season in earnest.

However, their results are expected to be subdued due to weak spending by key U.S. clients.

Of interest will also be U.S. inflation data on Thursday. A soft print will likely fortify bets of a rate cut in March, making stocks generally, and IT companies in particular, attractive.

India's inflation likely rose in December but remained within the central bank's target range, data on Friday is expected to show.

Elevated inflation due to high food prices could keep the central bank on an extended rate pause and weigh on rate-sensitive sectors like consumer, realty and auto.

Consumer stocks have been under pressure after the likes of Marico and Godrej Consumer warned of weak rural demand hitting sales.

Oil and gas stocks lost 1%. ONGC, Bharat Petroleum, Hindustan Petroleum and Indian Oil fell 2%-3% after Goldman Sachs downgraded the trio on valuation worries.

Realty index dropped 1% after jumping nearly 11.5% in a five-session record-breaking surge. (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman, Varun H K and Savio D'Souza)