Markets trim gains after RBI keeps rates unchanged

Markets came off from day’s high after the RBI kept all key rates unchanged.

The cash reserve ratio (CRR), repo rate and SLR have been kept unchanged. The repo rates has been kept unchanged at 8.5%. CRR has been kept unchanged at 6%. SLR has been kept unchanged at 24%. RBI in it's review said that the downside risk to growth has clearly increased.

By 1210 hrs, the Sensex was up 94 points at 15,933 and the 50-share Nifty gained 31 points at 4,778.

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(Updated at 1130 hrs)

Markets have held on to gains this morning with the Sensex up 165 points at 16,002. Earlier in the day, the index touched a high of 16,043. Nifty is up 57 points at 4,803.

Asian markets are up marginally mirroring signs of strength in the U.S. economy but the market looked vulnerable as investors fret about the effect of Europe's debt crisis on the global economy. Nikkei has is up 0.4% at 8,412. Hang Seng, Seoul Composite and Straits Times were up as well.

Markets await the Reserve Bank of India's credit policy review which is expected to come out within the next hour.

Chief economic adviser, Kaushik Basu, said on Thursday that he expects food inflation to drop to 3% within a month. According to daya released yesterday, the rate of price rise in food articles declined to a four-year low of 4.35 per cent for the week ended December 3.

IT stocks fell as rupee strengthened against the dollar after the Reserve Bank of India took steps to check the recent sharp slide in the local currency. BSE IT index has slipped 0.5% to 5,742. Wipro and TCS have shed 1.3% each. Infosys is trading flat at Rs 2,712.

Rate sensitive stocks are in the green. BSE auto index has gained 2.3% to 8,357. Bankex and realty index have advanced over 1% each this morning.

Bharti Airtel has jumped 4% to Rs 350. Tata Motors and Tata Power from the Tata stable have advanced 3% each. From the auto pack - Bajaj Auto, Mahindra & Mahindra and Hero MotoCorp have added 2-3% each. Hindalco, ONGC, DLF are the othe gainers.

Aviation companies have gone up after oil marketing companies cut jet fuel rates by 1.3% on Thursday. Jet Airways has added 1.7% to Rs 222. SpiceJet is up 4% at Rs 17.85 ad Kingfisher has adavnced 1% to Rs 23.10.

BSE market breadth is positive. Out of 2,372 stocks traded, 1,517 stoks have advanced while 754 stocks have declined.