Mumbai: Markets were trading barely changed on Tuesday as investors were cautious ahead of the Reserve Bank of India’s quarterly policy review announcement.
By 10:47am, the 30-share BSE index was trading up 0.02% at 18,023.02 points, with two-thirds of its components advancing. The 50-share NSE index was barely changed at 5,415.70 points.
“People are just nervous before the RBI policy,” said Arun Kejriwal, director of research firm KRIS. “Monsoon is improving which is good. But looking at the recent earnings, we are seeing input cost pressures. For banks, asset quality is getting to be a worry.”
Total rainfall since 1 June, the start of the vital, four-month monsoon season was 16% below normal on 19 July, but the seasonal deficit narrowed to 7% on Monday, data from the India Meteorological Department showed.
The benchmark index is up 3.2% year to date. Foreign funds have poured in $9 billion in Indian equities so far in 2010, a portion of which was invested in primary market.
Financials were mixed ahead of the central bank policy announcement.
Leading lender State Bank of India rose 0.1% while rival ICICI Bank dropped 1.3%. Mortgage lender Housing Development Finance Corp was trading 0.1% lower.
Energy giant Reliance Industries led the gains ahead of its quarterly earnings announcement. Reliance Industries, which has the highest weight on the main index, was up 0.5%. According to a Reuters poll, Reliance may report a net profit of Rs4,830 crore.
Top power producer NTPC declined 0.9% as it reported a 16% drop in its June quarter net profit, after market hours on Monday. Top engineering and construction firm Larsen & Toubro was down 2.6%, as it details its June-quarter earnings later in the day, while Hindustan Unilever, which also declares its quarterly numbers, firmed 0.9%.
In the broader market, gainers led losers in a ratio of 1.1:1 in a volume of 82 million shares.
Software firm Tech Mahindra was down 3.4% at Rs712.50 after it reported a 9.1% rise in its June-quarter net profit which did not meet expectations, dealers said. JPMorgan downgraded the stock to neutral from “overweight”, while BNP Paribas cut its rating to hold from buy.
Mahindra Holidays dropped 4.9% to Rs518.55, after the hospitality services provider said its June-quarter net profit declined 61%.
Motorcycle maker Hero Honda bounced back 3.1% to Rs1,868.70, after it had dropped 7.5% in the previous session.