Markets erase morning gains to turn flat ahead of RBI policy decision

MARKET NEWS - Benchmark indices erased morning gains to turn flat as investors stay cautious ahead of the EBI policy Decision due later today. According to analysts, the central bank may opt for a less hawkish tone and will leave interest rates unchanged as inflation is running well below forecasts, and the economy has slowed more than expected. Better than expected monsoon forecast by IMD added to the gains.

Focus was also on Britain's general election as it maps its exit from the European Union. British Prime Minister Theresa May looks on course to increase her parliamentary majority in Thursday's poll. While the European Central Bank's policy meeting and former FBI Director James Comey's testimony before a Senate panel, kept the global stocks mixed.

At 12:44 pm, the S&P BSE Sensex was trading at 31,192, up 2 points, while the broader Nifty50 was ruling at 9,638, up 2 points.

In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices gained  0.3% each.

"The indecisiveness near 9,700 has not caused any sharp loss in confidence so far, and the slippages so far have been held above last week’s peaks. While this suggests that bullish intent is still dominant, volatility could still dominate. If Nifty remians unsettled at 9,640, then 9,530/9,500 levels might come back in the reckoning," said Geojit Financial Services in a note.

Buzzing Stocks

GAIL, ICICI Bank, M&M, ITC and Bharti Airtel gained the most on BSE Sensex while Wipro, TCS, Dr Reddy's and Asian Paints lost the most on the index.

Bharti Airtel gained 1%, after the company received statutory approval on Tuesday from the Competition Commission of India (CCI) for its proposed merger with the Indian unit of Norway's Telenor.

RCom fell 3% after reports that Rating agencies Moody’s and Fitch on Tuesday cut its rating for the second time in a week, even as the telco received a seven-month respite from bankers on debt repayment. Moody’s cut its rating to ‘Ca’, which suggests the debt is highly speculative and likely in, or very near, default. Fitch lowered RCom’s rating to ‘RD’ from ‘CCC’.
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