Markets end lower ahead of RBI policy meet

Sensex, Nifty down 0.2 %

Indian markets ended slightly lower on Monday as investors took a pause ahead of the Reserve Bank of India (RBI)’s second bi-monthly policy meet on Tuesday. Further, the impending global events such as the US Federal Reserve meeting and Brexit have also weighed on markets.

On Monday, the 30-share BSE Sensex lost 65.58 points to settle at 26,777.45 and the 50-share NSE Nifty declined 19.75 points to 8,201.05.

RBI is widely expected to maintain status quo on the key benchmark interest rates in its bimonthly monetary policy review meet. Analysts expect the central bank to take the decision on interest rates in August after monitoring the progress of monsoon.

Jayant Manglik, president of retail distribution at Religare Securities, said, “Markets ended marginally lower in a dull trading session on Monday as participants preferred to sit on the sidelines ahead of RBI's policy meet. Mostly, sectoral indices traded in line with index and ended on flat note; however, movements in midcap and smallcap saved the participants' day. Manglik added: “Considering the latest inflation figures and upcoming global events, we believe RBI will go with the Street census and maintain status quo in this policy. So, we suggest keeping a positive yet cautious approach and reiterate our view to lighten trading positions ahead of the event.”

On the global front, June is expected to be an eventful month. The US Federal Reserve would conclude its two-day meeting on June 16. However, it is widely expected that the Fed will take a dovish stance on interest rates, especially after a weaker-than-expected US jobs data. Further, opinion polls in the UK suggest that Brexit is gathering momentum. Should Brexit happen, it can weigh on the markets.

Sectorally, telecom stocks took a hit after Reliance Jio started taking registrations from interested people for network trials, indicating that a launch might be around the corner. Bharti Airtel, Reliance Communications and Idea Cellular have lost between 0.5 per cent and three per cent.

Lupin, Maruti Suzuki, Sun Pharma and Axis Bank slipped 1-2 per cent. On the flip side, Tata Motors, State Bank of India, Mahindra & Mahindra, and GAIL gained 1-1.5 per cent.