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Markets trading flat ahead of RBI policy review

Markets were trading flat as gains were capped at higher levels as investors adopted wait-and-watch stance ahead of the central bank's policy announcement at 1100 h

SI Reporter  |  Mumbai 

were trading flat as further gains were capped at higher levels with investors remaining cautious ahead of the central bank's policy announcement at 1100 hours today.

At 9:30AM, the 30-share Sensex was up 2 points at 19,595 and the 50-share Nifty was up 2 points at 5,834.

Most of the treasury executives and economists expect the Reserve Bank of India to highlight risks from a fragile external sector and dwell upon a high current account deficit and imported inflation due to a weak rupee in its policy review today.

Meanwhile, the Indian rupee weakened against the US dollar, down 25 paise at Rs 59.66 to the dollar ahead of the RBI policy review.

According to technical experts, "The key momentum oscillators are still in favour of the bears, hence the index is likely to extend losses in the near term. The index may face near resistance around 5,870, and slightly higher around 5,900-5,925 odd levels."

Overnight US stocks ended lower on fear over dovish comments from US Fed. The Dow Jones industrial average was down 36.86 points, or 0.24 percent, at 15,521.97. The Standard & Poor's 500 Index was down 6.32 points, or 0.37 percent, at 1,685.33. The Nasdaq Composite Index was down 14.02 points, or 0.39 percent, at 3,599.14.

Asian firmed up after China's central bank infused funds into money via open market operations on Tuesday for the first time since February, easing fears of another cash crunch ahead of the month end after a severe cash squeeze in June caused market panic. The Shanghai Composite was up nearly 1%, Hang Seng gained 0.8% while Nikkei and Straits Times were up 0.4% each.

Sensex gainers were led by Larsen & Toubro on value buying at lower levels after the stock witnesed sharp correction post its results announcement. The stock was up 1.4%.

Software shares firmed up on the back of a weakening rupee. Infosys was up 0.5% while TCS gained 0.3%.

Mortgage lender HDFC and index heavyweight Reliance Industries were some of the other Sensex gainers.

FMCG majors ITC and Hindustan Unilever extended losses on profit taking after gains of over 20% in the past one month. ITC was down 1.1% while Hindustan Unilever eased 1.2%.

Other losers include, HDFC Bank, Bharti Airtel, Sterlite Ind and Coal India.

Among other shares, Jet Airways (India) is trading higher by 2% at Rs 421, falling over 5% from intra-day high, after the Foreign Investment Promotion Board (FIPB) gave its conditional approval to the company’s proposal to sell a 24% stake to Abu Dhabi-based Etihad Airways for Rs 2,058 crore.

In the broader market, the BSE Mid-cap index and BSE Small-cap index were trading marginally higher up 0.1% each.

Market breadth was slightly strong with 402 gainers and 300 losers on the BSE.

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First Published: Tue, July 30 2013. 09:30 IST