Markets open flat ahead of RBI policy

Markets are trading on a flattish note in the opening trades ahead of the RBI's Monetary Policy review. The Reserve Bank of India (RBI) will announce the second Quarter Review of Monetary Policy 2013-14 today.

By 9:30, the Sensex has declined by 7 points at 20,563 mark and the Nifty slipped by 3 points at 6,098 levels.

Analysts broadly expect RBI to raise its repo rate by 25 basis points (bps) and cut marginal standing facility (MSF) by 25 bps.

The market will remain volatile this week as traders will roll over positions in the futures & options (F&O) segment from the near month to November series. The near month October derivatives contract will expire on Thursday.

On the global front, Asian shares wavered in recent ranges and the dollar held not far above its recent lows on Tuesday, as investors awaited the outcome of the US Federal Reserve's policy meeting this week, at which it is widely expected to stay the course on stimulus.

Australian shares shed about 0.3% after surging 1% on Monday to a new five-year high, while MSCI's broadest index of Asia-Pacific shares outside Japan was weaving in an out of positive territory.

Japan's Nikkei stock average gave up about 0.1% but was off session lows, bolstered by data showing consumer spending in Japan jumped in September as shoppers frontloaded purchases before a sales tax increase next year.

Back home, BSE Consumer Durables index has surged by over 1% followed by counters like Auto, Healthcare, FMCG and IT, all gaining between 0.1-0.5%. However, BSE Realty, Bankex and Capital Goods indices have plunged by nearly 1% each.

The main gainers on the Sensex at this hour include Maruti Suzuki, Hero Moto, Sun Pharma, Bharti Airtel and M&M, all gaining between 1-4%.

Maruti Suzuki India has rallied over 4% at Rs 1,575 in early morning deals on NSE after reporting a better than expected net profit at Rs 670 crore for the quarter ended September 2013 (Q2FY2014), driven by strong growth in exports, favorable exchange rate and cost control measures. Analyst on an average had expected profit of Rs 551 crore for the quarter. The company had reported profit of Rs 227 crore in year ago quarter.

On the losing side, BHEL, L&T, SBI, HDFC Bank and ICICI Bank have declined between 1-2%.

Among broader markets, BSE Midcap and Smallcap indices have slipped between 0.1-0.3%.

The market breadth in BSE remains negative with 437 shares declining and 317 shares advancing.