Markets continue to trade flat on account of global weakness and expectations of a 25 bps rate hike. The Sensex has fallen 11 points to 20,348and the Nifty has declined 3 oints to 6124. Rate sensitive realty stocks continue to remain under pressure.
----------------------------------------Updated 10:05 AM
Reserve Bank of India in its macroeconomic outlook hinted raising rates for the sixth time to anchor inflationary expections as inflation continued to remain stubbornly high at around 8.6%, above the RBI's comfort level of 6%.
Angel Broking in a research note indicated that RBI will hike reverse repo and repo rate by 25 bps to 6.25% and 5.25% each, and CRR (Cash Reserve Ratio) may remain unchanged considering current liquidity crunch. SMC Global Equity in its morning note said, "markets are likely to trade in a range today taking cues from mixed global markets and volatility may arise ahead of the Reserve Bank of India's monetary policy reviewed today."
Analysts do not expect markets to rise considerably by Diwali. S. P. Tulsian, CEO and Editor, Premium Investments said,"Do not see Sensex scaling up to 21,000 levels by Diwali as there are only three trading sessions left, Coal India will not be included in the Sensex immediately." The mammoth Coal India issue will get listed on the bourses on November 4th. "Expect listing between Rs 280-290 and investors who have just invested for listing gains should exit at Rs 290," Tulsian added.
Metals lost sheen across Asia as investors turned cautious ahead of US elections and Federal Reserves decision on monetary easing. Hong Kong shares were in a tight range, the Hang Seng were trading flat, up 0.02%, metal shares were leading the losses. Japan's Nikkei dipped towards seven week low on back of rising Yen, the index fell 0.1%. China's Shanghai Composite pared losses, surged 0.3%, Seoul Composite and Straight times were trading marginally in the red.
In India, metal stocks SAIL and JSW Steel were in the limelight, down 0.7% and 1% each after they cut the prices of hot rolled steel products by around two percent each.RNRL fell 0.4% on news that it will stop trading from November 10 due to merger with Reliance Power. Emami surged 6% on account of price hike, and Tulip Telecom rose 1% after it received Rs 38 cr order.
BSE Realty index was leading the losses due to an expected rate hike. Unitech declined 1.2%, Indiabulls Real Estate dropped 1.2% and DLF fell 0.7%.
Consumer Durables were the top gainers from the sectoral pack, the index surged 1.4%. Rajesh Exports rose 3.1%, Titan Industries gained 1.8% and Blue Star gained 0.6%.
Broader markets were also trading marginally higher, the midcap index rose 0.3% and the smallcap rose 0.2% each.
ACC, up 3.8%, Ambuja Cements, up 3.4% and Siemens, up 1.7% were the top gianers on Nifty; ICICI Bank, down 1.4%, Reliance Industries, down 1.3% and Bharti Airtel, down 1.2% were the top losers.
From the Nifty stocks, S. P. Tulsian does not see further upside for energy conglomerate Reliance Industries unless their is any big coorporate announcement. Tulsian is bullish on Tata Steel and Bharti Airtel at the current levels."Bharti Airtel has started repaying its debt and the balance sheet is getting de-leveraged over a period of time and for the steel industry, ferrous sector in which Tata Steel has dominant presence will do well," Tulsian added.
Market breadth was positive, 1260 stocks advanced for 1087 declining stocks.