Indian shares pared early gains to trade flat on Thursday, as a handful of downbeat earnings from key corporates offset optimism from favourable U.S. inflation data and persistent foreign buying in Indian equities.

The Nifty 50 was up 0.01% at 18,316.20 as of 10:10 a.m. IST, while the S&P BSE Sensex rose 0.04% to 61,965.94. Both indexes had opened higher.

Ten of the 13 major sectoral indexes advanced, with high weightage financials and information technology (IT) gaining 0.4% and 0.5%, respectively.

India's benchmark Nifty 50 has added over 1.3% so far this week, gaining 5.5% since March 31, 2023.

Shares of Adani Enterprises rose 4.38% after the company's board said it will consider a fundraise.

"The main driver of the ongoing rally is the sustained FII inflows," said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Foreign institutional investors (FIIs) have purchased shares worth 176.41 billion Indian rupees ($2.16 billion) over the last ten sessions, according to provisional data from the National Stock Exchange.

"The appreciating rupee is one of the reasons why FIIs have turned buyers. Also, FIIs have changed their strategy of 'sell India, buy China' which they pursued in January and February," Vijayakumar added.

Pharma lost over 1%, dragged by Dr. Reddy's Laboratories Ltd., which lost over 5% after reporting a less-than-expected rise in March-quarter consolidated profit on Wednesday.

Larsen & Toubro Ltd fell over 5% after analysts flagged weak core profit margins in the March quarter.

Both Larsen & Toubro and Dr Reddy's were among the top Nifty 50 losers.

Global equities advanced after data showed that U.S. consumer price inflation slowed to its lowest in two years in April, signalling that the Federal Reserve's rate hikes have managed to tackle high inflation.

The probability of a rate hike at the next Fed meeting in June slid to 9.6% as of 8:00 a.m. IST from 21.9% ahead of the data release. (Reporting by Bharath Rajeswaran in Bengaluru; Editing by Nivedita Bhattacharjee, Varun H K, and Janane Venkatraman)