Investors in wait n watch mode ahead of RBI policy outcome

Mumbai: BSE Sensex and NSE Nifty snapped their six-session rally to close marginally lower on Thursday as investors booked profit in banking, finance and energy counters ahead of the RBI's policy decision. The Reserve Bank of India's rate-setting panel will announce its bi-monthly monetary policy on Friday amid expectations of at least a 35-basis-point hike in the interest rate to check high inflation. A depreciating rupee further weighed on sentiment, traders said.

In choppy trade, the 30-share BSE Sensex ended 51.73 points or 0.09 per cent lower at 58,298.80. The broader NSE Nifty dipped 6.15 points or 0.04 per cent to 17,382.

"Profit-taking finally came into play after 6-session gains, as rate-sensitive sectors like banking and realty faltered ahead of the RBI's policy meet outcome on Friday. Key indices pared most of their losses towards the end as strength in other Asian and European indices aided sentiment," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.

"Markets will be closely eyeing the outcome of MPC's monetary policy meet on Friday. Before that, the performance of the global indices amid the fresh developments on China-Taiwan tension would dictate the trend in early trades. On the index front, the Nifty has been seeing consolidation on expected lines. However, rise in volatility is making life tough for the traders.

We recommend preferring hedged positions and focusing on the defensive pack as well," said Ajit Mishra, V-P (research), Religare Broking Ltd. Foreign institutional investors (FIIs) remained net buyers in the capital markets as they bought shares worth Rs 765.17 crore on Wednesday, as per exchange data.

In the broader market, the BSE midcap gauge went higher by 0.29 per cent and the smallcap index advanced 0.25 per cent. From the BSE sectoral indices, telecom declined by 1.14 per cent, followed by realty (1.11 per cent), utilities (0.70 per cent) and power (0.64 per cent).