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Markets have started the trading session on a lower note ahead of the Reserve Bank of India's mid-quarter policy review scheduled today.
Markets expert feel that a cut in key policy rates may not happen due to rupee volatility and inflation risks. However, RBI may reduce the MSF rate.
By 9:30, the Sensex was lower by 42 points at 20,605 mark and the Nifty declined 10 points at 6,105 mark.
Markets witnessed strong rally yesterday on expectation that fund flows into emerging markets including India would continue as the US Federal Reserve's surprisingly decided to continue its stimulus programme.
Asian shares paused on Friday as investors sat back to ponder the US Federal Reserve's policy outlook, a day after the world's most powerful central bank triggered a global rally in riskier asset markets with an unexpected decision to maintain its stimulus program.
The dollar drifted off a seven-month low against a basket of major currencies and US Treasury yields rose after a string of upbeat US data provided a reminder to markets that the Fed is not far off from the day when it starts to cut stimulus.
Japanese shares were up 0.2% in early trade, while Australian stocks were a tad softer. Markets in China and South Korea were closed for the mid-autumn holiday.
Back home, the rupee opened weak against the dollar in morning trade today tracking Asian cues where the greenback turned stronger a day after Fed decided against tapering its bond-buying programme.
Rupee opened at 62.05 against the dollar compared to yesterday's closing level of 61.77/dollar.
On the sectoral front, BSE Power, Healthcare and Auto indices have gained by 1% each. However, BSE Metal and FMCG indices are down by nearly 1% each.
The main losers on the Sensex at this hour include JSPL, Sesa Goa, ONGC, ICICI Bank, Hero Moto and Bharti Airtel, all declining between 1-2%.
On the gaining side, Sun Pharma, Tata Motors, Tata Power, Wipro and M&M have gained between 1-2%.
Ranbaxy Laboratories has plunged nearly 14% to Rs 302 in early morning deals on reports that the company’s manufacturing facility in United State (US) is under surveillance of the US Food and Drug Administration (FDA).
The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up 0.1-0.2%.
The market breadth in BSE remains marginally positive with 490 shares advancing and 374 shares declining.
