Markets open flat; eye on RBI policy

Markets make modest losses in the morning session as tensed investors jostle for positioning ahead of RBI policy next weak. The Sensex has fallen 43 points to 19,898 and the Nifty has dipped 13 points to 5975.
 
Asian markets dipped in the morning session followed by weak economic data from Japan. US bourses also ended lower as investors await US Federal Reserve policy next week and third quarter GDP data which will be out later today. Nikkei 225 dipped 1.7% after Japan's industrial output slowed to 1.9% in September clocking its fourth consecutive decline. In Hong Kong, AIA Group (Asian Unit of American International Group) made a premium debut, the Heng seng index was down 1.4%. China's Shanghai Composite was down 0.6% in early dealings, Seoul Composite and Taiwan Weighted were also trading lower.

HDFC Securities in research note said "markets may stabilize at lower levels and aggresive buying may not happen ahead of 3rd quarter US GDP data today."

Earnings continue to weigh on the stock price, Cairn India rose 2.5% as September quarter net trebled to Rs 1,585 cr, Bank of Baroda dipped 1.1% although Q2 net jumped 61%.

Rate sensitive stocks declined amid concerns that RBI may raise key rates next Tuesday. "Looking at the inflation scenario and considering that RBI has been quite proactive in managing the same, expect atleast 25 bps rate hike in the upcoming credit policy, and possibly about 50 bps rate hike over the next three – six months," Tejas Doshi, Vice President - Research, Sushil Finance said.

Realty index was down 0.4%. Peninsula Land slipped 2.8%, Indiabulls Real Estate dropped 1.5% and DB Realty fell 1.2%.

Metal index was also down 0.8%, SAIL fell 3.7%, Hindalco dropped 2.2% and Sesa Goa fell 1.6%.

Hindalco, Tata Steel and Bharti Airtel, up over 1% were top losers on Sensex;Mahindra & Mahindra, up 0.7%, NTPC up 0.6%, and ITC, up 0.5% were the top losers.