Sensex trades flat, Nifty holds above 8,150 ahead of RBI policy

The benchmark indices were trading in a range on Wednesday as investors hoped Reserve Bank of India (RBI) will reduce interest rates in its policy review later in the day. Positive cues from global markets also aided sentiment. 

At 11:30 am, the S&P BSE Sensex was trading at 26,426, up 33 points, while the broader Nifty50 was ruling at 8,155, up 13 points. 

Broader market depicted strength with 1,040 advances over 363 declines on the BSE. Sixty stocks remained unchanged. 

BSE Midcap index rose 0.39%, while BSE Smallcap index advanced 0.43%.

Interest rate sensitive bank, realty and auto stocks are in focus with BSE Auto, BSE Bankex and BSE Realty gaining up to 0.70%. However, BSE Oil & Gas was the top sectoral gainer and added 1%. 

Adani Enterprises was trading 1% higher after the company announced it has incorporated a wholly-owned subsidiary namely, Adani Cementation Limited (ACL).

VST Tillers Tractors gained over 4% after the company reported power tiller sales of 1,495 units and tractors sales of 684 units in November 2016. In another development, State Bank of India (SBI) has tied up with VST Tillers for financing farm machinery.

Among losers, Sun Pharma shed the most (4%) on Sensex. 

Meanwhile, on Tuesday, foreign institutional investors bought equities worth Rs 162 crore, while domestic institutional investors were net sellers and sold equities worth Rs 165 crore, provisional data available with BSE suggested.

RBI policy outcome due today
 

A majority of the nearly 60 analysts polled by Reuters predict the RBI will cut the repo rate by 25 basis points (bps) to 6%, the lowest since November 2010, while six predicted a deeper 50 bps cut.

Pressure on the RBI and Governor Urjit Patel to act has grown since Prime Minister Narendra Modi stunned the country on November 8 with a drastic plan to abolish Rs 500 and Rs 1,000 notes, removing 86% of the currency in circulation in a bid to crack down on India's "shadow economy."

 “Despite positive outcome of RBI meet, there is a high possibility of Nifty showing weakness from near the hurdles of around 8,185-8,200 levels in coming sessions,” said brokerage HDFC Securities in a technical note.

Oil prices drop

Oil prices fell today on persistent doubts a planned crude production cut led by OPEC and Russia would be deep enough to end a supply overhang that has dogged markets for over two years.

International Brent crude oil futures were trading at $53.69 per barrel, down 24 cents, or 0.45%, from their last close.

US West Texas Intermediate (WTI) crude futures were down 19 cents, or 0.37%, at 50.74 per barrel.

Oil prices shot up as much as 19% after the Organization of the Petroleum Exporting Countries (OPEC) and Russia last week announced they would jointly cut production next year in an attempt to prop up markets.

Global markets

Asian shares edged up on Wednesday as investors covered short positions in European equities as they pondered the ramifications of Italy's referendum and looked to the upcoming policy meeting of the European Central Bank.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent while Japan's Nikkei gained 0.4%.

The Australian market rose despite the data showing the economy contracted in the third quarter. While rate futures imply scant chance of another rate cut in the next few months, all thought of a hike has also vanished.

The MSCI's broadest gauge of the world's stock markets rose to its highest level in almost two months.

(With inputs from Reuters)