Markets open on a quiet note

Markets were trading flat in the morning session following subdued cues from Asia and as investors turned to the sidelines ahead of the August inflation data. The Nifty advanced four points, at 4,942 and the Sensex was up 12 points, 16,473.

The August inflation data, due around noon today is expected to set the tone for the Reserve Bank of India's monetary policy on Friday. Economists polled by Reuters expect the Wholesale Price Index close to double digits, around 9.6% for August due surge in food and fuel prices.

Ashish Chaturmohta, Vice President - Derivatives and Technical Analyst from IIFL Wealth said, "The Nifty future has a crucial support around 4900 levels, a close below this level can drag the Index towards 4800 – 4750 levels. On upside, any rally till 5050 can be considered a pullback rally."

Markets across Asia were trading slightly lower, the Nikkei Stock Average was down 0.2% and the Shanghai Composite was trading flat, at 2,588. Hong Kong's Hang Seng was trading up 0.3%.

Wall Street indices overnight took some respite after Germany Chancellor, Angela Merkel made an attempt to reassure nervous investors that the top priority of European policy makers was to avoid “uncontrolled insolvency” for Greece. US President Barack Obama also urged for greater efforts to solve the Euro-zone debt crisis. The Dow, Nasdaq and S&P 500 ended between 0.5-1.5% each.

Foreign Institutional Investors have turned net sellers in the Indian equity markets; they were net sellers for the second consecutive day as they sold shares worth Rs 468 crore in cash, while the Domestic Institutional Investors bought shares worth Rs 122 crore. In derivatives, the activity in index options was quite high; they were sellers of Rs 14 crore in index options with 2% rise in open interest. They were buyers of Rs 133 crore in index futures and Rs 290 crore in stock futures. Overall, FIIs were net buyers of Rs 425 crore in F&O.

HDFC (down 1.3%), HDFC Bank (down 1%) and Bharti Airtel (down 4%) were weighing on the Sensex, dragging the index down by almost 40 points. Tata Motors was up 2%, Infosys was up 1.6% and Coal India added 1.3%.

Among the sectoral indices, IT shares were leading the gains for the second straight session. HCL Technologies was up 2%, Infosys added 1.6% and Mphasis was up 1.5%.

Capital Goods index on BSE slipped 0.5% due to concerns of rising interest rates affecting the investment cycle. BEML was down 3.2%, BGR Energy and ABB decline over 1% each.

The smallcap and the midcap indices were up 0.3% and 0.7% each.

Market breadth was positive, 1,138 stocks advanced for 549 declining stocks.