Markets in wait-and-watch mode ahead of RBI meet

MUMBAI (Reuters) - India's stock markets saw lacklustre trading in a narrow range on Monday as investors chose to avoid risky bets a day ahead of the Reserve Bank of India's policy meet.

The central bank is expected cut its key repo rate to a four-year low to help support the domestic economy at a time when consumer inflation is at a record low, but may express caution about easing further as price risks still loom.

A Reuters poll last week showed 45 of 51 economists expect the RBI to cut the repo rate by 25 basis points to 7.00 percent, its lowest since May 2011.

"There should be a 25 basis point cut in interest rate and markets may react positively to it," said Taher Badshah, senior vice president & co-head equities at Motilal Oswal Asset Management Co.

"Market should remain sideways though in the near term due to Bihar (state) elections and upcoming results season."

The benchmark Sensex was trading 0.35 percent lower while the Nifty was down 0.27 percent.

IT, consumer discretionary and energy stocks lagged while financials, pharma and telecom stocks gained.

Infosys fell 2.5 percent and was the biggest drag on the NSE index. Other blue-chip stocks like Tata Motors down 3.8 percent, Coal India down 2.6 percent and Reliance down 0.4 percent also saw selling pressure.

Sun Pharmaceutical slipped 2.6 percent, while its research arm Sun Pharma Advanced Research Co Ltd (SPARC) also fell 2.6 percent after the U.S. FDA revoked approval for SPARC's seizure drug, citing manufacturing quality problems at its plant.

Dr Reddy's Laboratories bucked the trend, rising as much as 6.5 percent, after it launched a generic version of AstraZeneca Plc's heartburn pill Nexium in the United States on Sept. 25.

(Reporting by Karen Rebelo; Editing by Gopakumar Warrier)