Indian shares traded flat with benchmark index Sensex touching 20,000 levels while 50-share Nifty tad down in morning trades.
Reliance Industries gained nearly 2%, however, selling pressure was witnessed in rate-sensitive sectors such as banks and automobiles.
Reserve Bank of India Governor D Subbarao on Tuesday tempered expectations of interest rate cuts beginning this month, saying prices of consumer products and manufactured items are still rising, reports showed.
At 10:15AM, the 30-share Sensex of the Bombay Stock Exchange rose 17 points and traded at20,003.19 and the 50-share Nifty dropped 3.9 points at 6,052 in morning trades.
Risk appetite was also frail on caution ahead of key earnings announcement this week starting Bajaj Auto which is scheduled later today. HCL Technologies and Hero MotoCorp will unveil results on Jan 17 while HDFC Bank, ITC, Reliance Industries and Wipro on Jan 18.
Adding to the woes was concerns over global growth recovery after World Bank on Tuesday sharply cut its 2013 outlook for the world economy to 2.4 percent from its last forecast in June of 3.0 percent, blaming an unexpectedly sluggish recovery in developed countries for holding back global growth.
Asian markets dropped with the regional benchmark index heading for its first decline in three days, as Japan’s Nikkei Stock Average retreated from a 32-month high on profit-booking amid earnings concerns.
Hong Kong's Hang Seng declined 0.24% to 23,324, Taiwan's Weighted index fell 0.3% to 7,742, Singapore's Straits Times was up 0.27% to 3,204 while China's Shanghai Composite declined 0.47% to 2,314 and Japan's Nikkei dropped 1.5% to 10,713 .
Back home, oil &gas, consumer durables, healthcare, power, PSU gained while IT, banks, auto, FMCG indexes dropped on BSE.
Among key Sensex stocks, Tata Motors & Mahindra and Mahindra fell 2% and 0.7% each, SBI and ICICI Bank fell 0.7% and 0.4%, Sterlite Industries and Jindal Steel down 0.1% and 0.5%, TCS and Infosys dropped 1% and 0.7% on BSE.
Among gainers, Dr Reddy's and Cipla rose 2% and 0.6%, Reliance Industries was up 1.6%, ITC gained 0.3%, Bajaj Auto was up 1.4% and HDFC, HDFC Bank gained 1% and 0.1% on BSE.
The other notable movers include, Orient Refractories that rose 3% at Rs 37.70, after the Dutch firm Dutch US Holding B.V. made an open offer to acquire additional 26% stake in the company at price of Rs 43 per share.
Deccan Chronicle Holdings has hit the lower circuit filter of 5% at Rs 6.80 with no buyers in the counter, after the National Stock Exchange (NSE) said that the trading in company’s shares will be suspended with effect from January 23, 2013 as the company failed to respond to NSE notice for non-compliance of listing agreement
The broader markets gained with mid-caps and small-caps rising 0.1% on BSE.
The market breadth was positive. Out of 1,800 stocks traded, 914 stocks advanced compared to 797 declines on BSE.
