Indian markets trade flat ahead of RBI’s policy review

Indian equity benchmarks have made a flat-to-negative opening and are hovering little below their pre-close mark as market participants remained on sidelines ahead of Reserve Bank of India’s (RBI) third-quarter policy review later today. Investors are widely anticipating the RBI will cut repo rates by 25 basis points, easing for the first time since April 2012, after inflation last month eased to a three-year low. However, there are concerns that the central bank may not take any action on the rate front. That’s because two weeks ago RBI Governor D Subbarao said that inflation was still high.

On the global front, most of the Asian equity indices were trading in the positive terrain on Tuesday’s morning trade after solid US data, but investors remained cautious ahead of more US economic reports and a Federal Reserve policy decision later in the week. South Korean shares edged up about 0.90 per cent after touching an 8-week low the day before on report of rise in business confidence in South Korea. While, the US markets ended on a mixed note as traders turned cautious after the mixed economic reports, while there was a bigger than expected increase in durable goods orders, then a separate report showed a sharp drop in pending home sales.

Back home, healthcare witnessed the maximum gain in trade followed by technology and metal while, consumer durables, realty and auto remained the top losers on the BSE sectoral space. The broader indices were outperforming benchmarks while, the market breadth on the BSE was positive; there were 892 shares on the gaining side against 796 shares on the losing side while 83 shares remain unchanged.

The BSE Sensex opened at 20,080.31; about 23 points lower compared to its previous closing of 20,103.35, and has touched a high and a low of 20,107.68 and 20,059.68 respectively.

The index is currently trading at 20,073.81, down by 29.54 points or 0.15%. There were 13 stocks advancing against 17 declines on the index.

The overall market breadth has made a positive start with 50.57% stocks advancing against 45.06% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.13% and 0.16% respectively.

The top gaining sectoral indices on the BSE were, Health Care up by 0.35%, TECk up by 0.16%, Metal up by 0.12% and IT up by 0.07%. While, Consumer Durables down by 0.97%, Realty down by 0.47%, Auto down by 0.35%, Capital Goods down by 0.28% and Power down by 0.28% were the few losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 1.15%, Sun Pharma up by 0.80%, Maruti Suzuki up by 0.73%, Tata Power up by 0.71% and Cipla up by 0.53%.

On the flip side, BHEL was down by 1.31%, Tata Motors was down by 1.22%, HDFC Bank was down by 0.88%, Hindustan Unilever was down by 0.85% and Gail India was down by 0.80% were the top losers on the Sensex.

Meanwhile, to ensure parity in the price of imported and locally-produced gas, the Union Ministry of Petroleum and Natural Gas will soon bring in a Uniform Gas Price Policy. The Union Minister for Petroleum and Natural Gas M Veerappa Moily said 'I have worked out the policy, but don't know whether it has to go to the Cabinet or not. The proposed policy will ensure one price for gas that is imported and that is produced here as imported gas currently costs high'.

Moily said that the gas price depends on the country from where it is imported. In Qatar it is a little less ($18), other countries it is $21, while, shale gas may work out very cheap. He pointed out that India might achieve self-sufficiency in gas by 2016-17.

On New Exploration Licensing Policy (NELP), Moily said that 40 oil and gas blocks have been approved under the NELP and the contractors, including our own PSUs, have taken them. However, defence, environment and some other departments raised some objection and wanted the No-Objection Certificate withdrawn.

Nearly $13 billion has been invested in those projects and is left to the Cabinet to decide whether or not to clear them. By adding further, Moily said that the implementation of the NELP will help us to ease out the situation in which some of the projects are facing obstacles. He said 'may be in June, two MMSCMD (metric million standard cubic metres per day) gas of ONGC will be available.  

The S&P CNX Nifty opened at 6,064.70; about 10 points lower compared to its previous closing of 6,074.80, and has touched a high and a low of 6,075.35 and 6,056.15 respectively. The index is currently trading at 6,067.20, down by 7.60 points or 0.13%. There were 20 stocks advancing against 29 declines and one remains unchanged on the index.

The top gainers of the Nifty were Axis Bank up by 2.98%, Bharti Airtel up by 1.20%, Sun Pharmaceuticals up by 0.91%, JP Associate up by 0.77% and Tata Power up by 0.75%.

On the flip side, Tata Motors down by 1.39%, Reliance Infrastructure down by 1.16%, BHEL down by 1.07%, HDFC Bank down by 1.02% and DLF down by 0.97% were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite added 0.89 points or 0.04% to 2,347.39, Jakarta Composite rose 13.13 points or 0.30% to 4,430.07, Nikkei 225 surged 102.36 points or 0.95% to 10,926.67, KOSPI Composite soared 16.65 points or 0.86% to 1,956.36 and Taiwan Weighted was up by 55.79 points or 0.72% to 7,770.46.

On the flip side, Straits Times declined 3.02 points or 0.09% to 3,270.89 and Hang Seng was down by 9.76 points or 0.04% to 23,662.12.