New Delhi, India (BBN)-Markets pared gains after the Reserve Bank of India (RBI) at its bi-monthly policy Tuesday kept key policy rates unchanged and reduced the statutory liquidity ratio by 50 basis points to 22.5 percent.
The RBI has kept the repo rate unchanged at 8 percent and the Cash Reserve Ratio unchanged at 4 percent, reports Business Standard.
At 11:15am, the 30-share Sensex was down 57 points at 24,628 and the 50-share Nifty was down 20 points at 7,342.
The benchmark indices are subdued ahead of the RBI's Credit Policy.
The Sensex is quoting at 24,760, higher by 75 points and the Nifty is at 7,387, up 24 points.
The midcap index is at 8,704, up 53 points and the smallcap index is at 9,266, up 69 points.
The interest-rate sensitive banking space is mellowed, with the Bank Nifty losing 27 points at 15,259, ahead of the central bank's policy; the realty index has inched higher ahead of the event.
On the economic front, the rupee has opened flat at 59.16 per dollar on Tuesday as against the previous day's closing value of 59.15 a dollar.
The dollar hovers at its highest in over three months against a basket of major currencies with the euro still in the doldrums.
The markets had opened flat-to-positive this morning after the runaway rally witnessed in the previous session.
The Sensex has moved in a tight range of a mere 100 points thereafter, as they await cues from the central bank on the rate front.
The Reserve Bank of India Governor Raghuram Rajan is widely expected to keep the country's key lending rate unchanged and temper his rhetoric on inflation as the government was elected on a platform of reviving economic growth.
But the markets would be closely watching for hawkish or dovish indications from the Reserve Bank governor on the way forward.
The metal pack is going strong this morning. Tata Steel has strengthened by 2.7 percent at Rs 506, Sesa Sterlite has gained 2.1 percent at Rs 285 and Hindalco has added 0.5 percent at Rs 151.
Select banking counters, in the rate-sensitive space, have moved higher ahead of the policy meet.
SBI has edged higher by 0.3 percent at Rs 2653, HDFC has added 0.3 percent at Rs 900, while Axis Bank and ICICI Bank are trading flat, with a positive bias.
In the realty space, DLF hgas gained 0.4 percent at Rs 210 and Kolhte Patil has gained 1.6 percent at Rs 139.
On the other hand, the FMCG and auto space are weak in early trades.
ITC has weakened by 0.9 percent at Rs 334 and Hindustan Unilever has shed 0.7 percent at Rs 596.
In the auto pack, M&M has shed 0.3 percent at Rs 1236 and Tata Motors has lost 0.3 percent at Rs 419.
In stock-specific news, companies having insurance businesses have surged on hopes that the Finance ministry would hike the limit on foreign direct investment in the insurance sector from 26 percent to 49 percent.
Furthermore, the government is likely to draw up plans to infuse more capital to ensure that the banks’ capital reserves do not remain too close to the minimum stipulated levels over a long term.
Reliance Capital has surged 2.2 percent to Rs 594.2 and Max India has jumped 2.7 percent to Rs 547, among others.
Zee Entertainment has soared by 3.37 percent to Rs 274.35 after RBI allowed up to 100 percent FII investment in the company. The investment limit for FIIs in the company stood at 49 percent earlier.
The market breadth is strong. Out of 1940 stocks traded on the BSE, there are 1233 advancing stocks as against 639 declines.
BBN/SS-03June14-12:10pm (BST)
