A benchmark index of the Indian equities markets was trading flat in Monday's post-afternoon trade session -- 18.70 points or 0.07 percent up.The markets traded cautiously ahead of the Reserve Bank of India's (RBI) fifth bi-monthly monetary policy review to be held here on Tuesday.The recent economic data which showed easing of retail and consumer inflation and a down turn in industrial and gross domestic product (GDP) expansion have led the India Inc. to demand for a rate cut."Markets are hoping for a rate cut in the RBI policy meeting next week. Going ahead, apart from the RBI meeting, fiscal reforms from the government will be needed for the markets to move higher on a sustainable basis,” said Dipen Shah, head of private client group research, Kotak Securities.
However, Geojit BNP Paribas' head - fundamental research, Vinod Nair said the RBI's commentary will be important to understand the possibility to cut rate, if not on Dec 2 but by next policy review. "Bank stocks have reason to be disappointed as RBI is not likely to cut rate now. Continuous increase in rupee may tend RBI to wait and understand the trajectory post Nov 2014 due to base impact as mentioned in Sep 14 policy," Nair said.Expectations of a dovish move by the RBI to cut key lending rates led to a healthy buying in interest sensitive stocks like consumer durables, healthcare, information technology (IT), bank and automobile stocks.
However, metal, oil and gas and capital goods scrip came under intense selling pressure.The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 28,748.22 points, was trading at 28,712.69 points (at 2.15 p.m.), up 18.70 points or 0.07 percent from the previous day's close at 28,693.99 points.The Sensex touched a high of 28,809.64 points and a low of 28,652.77 points in the trade so far.The S&P BSE consumer durables index gained 396.72 points, healthcare index went up by 158.34 points, auto index rose 137.10 points, IT index gained 112.02 points and bank index was higher by 111.93 points.However, metal index moved down 175.48 points. Oil and gas index plunged 163.44 points and capital goods index lost 140.75 points.The wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading flat down 19.55 points or 0.23 percent at 8,568.70 points.