Nifty, Sensex slip in morning trade as D-Street remains cautious ahead of monetary policy

• Sensex fell by 160 points or 0.24% and Nifty50 fell by 31 points or 0.16% in early morning trade.
• The US markets ended in the red and Asian market cues are mixed.
• The market is keeping an eye on the MPC decision on rate hikes to be announced on August 10.
  

Indian benchmark indices fell on Wednesday early morning extending the fall seen the day before — continued to remain cautious ahead of the Monetary Policy Committee (MPC) meeting on August 10.

Sensex fell by 160 points or 0.24% and Nifty50 fell by 31 points or 0.16% as of 9:30 am.

“With the Q1 results season coming to an end soon, the focus of the market will shift from micros to macros. The institutional activity in the market has turned neutral since the FII selling is matched by DII buying. A clear trend in the market may come from macros,” said Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services.

In stock specific action, Divis Lab, HCL Tech and Hero Motocorp are the main laggards falling between 1.2 to 2%. Meanwhile, Dr. Reddy’s BPCL and M&M are the gainers at the time of publishing.

Apart from the US CPI print, the key macro event is the RBI’s Monetary Policy Committee (MPC) decision on rate hikes. The MPC started its three-day deliberations on Tuesday. The rate setting panel is widely expected to maintain the status quo, and the announcement will be made on Thursday, August 10.

“Macro trends in India indicate impressive credit growth and improving capex. So, high quality stocks in banking and capital goods are likely to remain resilient. Investors can use weakness in the market to buy these stocks,” said Vijayakumar.

The US markets had ended in the red after Moody’s downgraded ten banks. Dow Jones Industrial Average fell by 0.4% and tech-heavy Nasdaq Composite fell by 0.7%.

The Asian markets are trading mixed with Japan’s Nikkei225 fell by 0.54% and Hong Kong’s Hang Seng index fell by 0.12%, while Singapore’s SGX Nifty was up by 0.13% and South Korea’s KOSPI is up by 1.05% at the time of going to the print.

The Brent crude fell by 0.2% in the morning and is trading at $85.9 per barrel.

On Tuesday, Indian markets closed in the red, after falling steeply in the intra day trade. Sensex fell 106 points or 0.16% and Nifty slipped 26 points or 0.13%.