Stock markets settle flat in volatile trade ahead of RBI's interest rate decision

Benchmark stock indices Sensex and Nifty closed flat in a volatile trade on Wednesday as investors stayed on the sidelines ahead of RBI's interest rate decision on Thursday.

The 30-share BSE Sensex declined 34.09 points or 0.05 per cent to settle at 72,152. During the day, it hit a high of 72,559.21 and a low of 71,938.22.

The Nifty ended marginally up by 1.10 points or 0.01 per cent to 21,930.50.

IT shares TCS, Infosys and Tech Mahindra declined due to profit taking offsetting gains from select banking and pharma shares.

"The domestic market exhibited cautious range-bound movement, despite robust PMI data and favourable global cues ahead of RBI policy meet. While no change in stance is anticipated, the RBI's commentary on any hints regarding potential rate cuts and improvements in liquidity will be closely monitored," Vinod Nair, Head of Research, Geojit Financial Services said.

Among the Sensex firms, State Bank of India rose the most by 3.78 per cent after the bank announced the acquisition of SBI CAPS subsidiary for Rs 708.07 crore.

Nestle India gained 1.68 per cent after it reported around 9 per cent growth in sales.

JSW Steel, Bajaj Finance, Axis Bank and Asian Paints were among the gainers.

Tech Mahindra, Power Grid, Infosys, Tata Consultancy Services, HDFC Bank, Wipro, Larsen & Toubro and NTPC were the major laggards.

In Asian markets, Seoul and Shanghai settled in the positive territory while Tokyo and Hong Kong ended in the negative zone.

European markets were mostly quoting lower. The US markets ended with gains on Tuesday.

Foreign institutional investors (FIIs) bought equities worth Rs 92.52 crore on Tuesday, according to exchange data.

The BSE benchmark climbed 454.67 points or 0.63 per cent to settle at 72,186.09 on Tuesday. The Nifty went up by 157.70 points or 0.72 per cent to 21,929.40.

Global oil benchmark Brent crude climbed 0.66 per cent to $79.11 a barrel.

Rupee closes at 82.96 with a gain of 9 paise 

The rupee appreciated 9 paise to close at 82.96 (provisional) against the US dollar on Wednesday, tracking a correction in the greenback against major currencies and fresh foreign capital inflows.

However, a rise in crude oil prices and muted domestic markets capped the sharp gains in the domestic unit, forex traders said.

At the interbank foreign exchange market, the local unit opened at 83.03 against the greenback. The unit hit an intraday high of 82.94 and a low of 83.09.

The local unit finally settled at 82.96 (provisional) against the dollar, higher by 9 paise from its previous close of 83.05.

"We expect the rupee to trade with a slight positive bias on a rise in global risk sentiments and a soft US Dollar. However, the surge in crude oil prices and hawkish comments from various major central bank officials may cap the sharp upside," said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.

Traders may take cues from trade balance data from the US. Investors may remain cautious ahead of the RBI’s monetary policy decision on Thursday.

"RBI is expected to keep its monetary policy unchanged. USD/INR spot price is expected to trade in a range of Rs 82.60 to Rs 83.30," Choudhary said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.17 per cent lower at 104.04.

"The US Dollar eased as traders booked profits after the greenback rose sharply over the previous two sessions. Positive tone in Euro and Pound amid hawkish comments from ECB officials also weighed on Dollar," Choudhary added.

Brent crude futures, the global oil benchmark, .climbed 0.66 per cent to $79.11 a barrel

Brent crude up

Crude oil prices on Wednesday increased Rs 32 to Rs 6,116 per barrel in futures trade as participants widened their positions following a firm spot demand.

On the Multi Commodity Exchange, crude oil for February delivery traded higher by Rs 32, or 0.53 per cent, at Rs 6,116 per barrel in 11,141 lots.

Analysts said raising of bets by participants kept crude oil prices higher in futures trade.

Globally, West Texas Intermediate crude oil was up by 0.27 per cent to  $73.51 per barrel, and Brent crude climbed 0.66 per cent to $79.11 a barrel.