Markets take a pause after record-setting rally

Nifty breaches 9,700 ahead of RBI policy meet

After ruling at historic highs for consecutive sessions, the market on Tuesday paused to catch some breath, with both the BSE Sensex and the Nifty50 coming down from their record highs as investors maintained cautious stance ahead of the outcome of the Reserve Bank of India (RBI) policy meet.

Continuing their dream bull run, though briefly, into the third session on Tuesday, the Sensex hit another intra-day record of 31,430.32 in early trade and the Nifty breached the psychological 9,700-level for the first time, before retreating. The Nifty opened at a new high of 9,704.25 and gained further ground to hit a new high of 9,709.30.

But the market's record-setting spree short-lived and the 30-share Sensex shed almost 119 points to end at 31,191, while the Nifty slumped nearly 38 points to finish at 9,637.

Some level of circumspection ahead of Wednesday's RBI policy review outcome resulted in profit-booking.

Also, market participants holding their bets ahead of the UK general elections and the European Central Bank (ECB) meeting added to the overall weak sentiment. Besides, the trading came under pressure tracking the gulf diplomatic crisis following the Arab countries' decisions led by Saudi Arabia to sever all ties with the tiny-yet- wealthy peninsular nation of Qatar over Islamist support. "Strong monsoon onset and RBI meet underpinned markets helping Nifty to 9,700 but weak Asian cues and rising tensions in the middle east kept risk appetite under check.

With GST deadline looming, focus is now on the executional issues, and the preparedness of firms to meet the roll-out deadline,” Geojit Financial Services’ Chief Market Strategist Anand James said.

The market sentiment took a short-term reversal in the absence of any meaningful fresh domestic triggers and also concerns of stretched valuation.

However, bucking the broader market trend, information technology services majors Tata Consultancy Services (TCS), Infosys and Wipro gained as much as 3.70 per cent on good amount of buying activity after recent sell-offs, which kept the Sensex fall under check.