Sensex, Nifty flat ahead of RBI policy, investors edgy

The BSE Sensex edged lower ahead of Reserve Bank of India's policy announcement on Tuesday. The Sensex traded 34 points or 0.17 per cent lower at 20.070 while the broader Nifty was down 5 points to 6,070 as of 09.30 a.m.

Investors are widely anticipating the Reserve Bank of India will cut repo rates by 25 basis points on Tuesday, easing for the first time since April 2012, after inflation last month eased to a three-year low.

"The market has already priced in a rate cut of at least 25 basis points," said Dipan Shah, head of research at Kotak Securities.

However, there are concerns that the central bank may not take any action on the rate front. That's because two weeks ago RBI Governor D Subbarao said that inflation was still high.

"If the RBI does not take any action, the chances of deeper cuts in the markets are likely. A close below 6,000 on the Nifty may lead to a deeper correction to 5,800 or even 5,600," Rohit Srivastava fund manager at Sharekhan said.

Market analyst Sarvendra Srivastava said 6,000 remained crucial support for the Nifty and Tuesday's close will be important for the way ahead.

Rate sensitive stocks were subdued. Private lender Axis Bank was the top Nifty gainer, rising nearly 4 per cent, after its QIP was oversubscribed. Maruti Suzuki, India's biggest car maker also saw buying interest on the back of recent upgrades. IT major HCL Tech extended gains after strong quarterly earnings and price upgrades.

Wipro, India's third largest IT outsourcer, was the top Nifty loser, down 1 per cent followed by infra lender IDFC.


Global cues:

Asian shares rose with the MSCI's broadest index of Asia-Pacific shares outside Japan advancing 0.7 per cent. Japan's Nikkei stock average reversed earlier declines and rose 1 per cent, buoyed by optimism over earnings of major banks.


(With inputs from Reuters)