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Nifty, Sensex little changed ahead of RBI policy decision

File photo of Bombay Stock Exchange (BSE) building in Mumbai. Photograph:( Reuters )

Reuters Bengaluru, Karnataka Aug 07, 2019, 10.40 AM (IST)

Indian shares were little changed on a volatile Wednesday as investors awaited the central bank's monetary policy decision, where it is expected to cut interest rates by 25 basis points.

The broader NSE Nifty was lower by 0.08 per cent at 10,936.50 as of 0405 GMT and the benchmark BSE Sensex was down 0.01 per cent at 36,966.28. Both indexes swung between marginal gains and losses in early trading.

A Reuters poll last month showed the Reserve Bank of India (RBI) would cut rates, as Asia's third-biggest economy grapples with slowing growth, higher taxes and a credit squeeze.

However, investors were wary as most banks have not passed on the central bank's rate cuts to the consumers and that there were no announcements from the RBI regarding the crisis among India's shadow banks.

"The RBI has already axed rates by 75 bps but that hasn't led to any meaningful transmission in the economy as banks didn't lower rates," said Saurabh Jain, assistant vice-president (research), SMC Global Securities.

"One can sense that nothing meaningful is in the offing in policy announcement and hence may be a dampener for the markets."

The Nifty metals index was the top drag for the day as it fell 1.38 per cent, while the commodities index fell 0.7 per cent.

The public sector bank index, which was up 0.66 per cent, and the IT index that rose 0.56 per cent were among the gaining sectors for the day.

Among stocks, Indiabulls Housing Finance fell 7 per cent after the company reported a fall in June-quarter profit on Tuesday.

Titan Company was also among the top NSE losers, as the stock declined 3.9 per cent.

Central Bank of India rose as much as 10 per cent after the lender reported better-than-expected earnings on Tuesday.

Yes Bank, which rose 2.23 per cent, was the top gainer among NSE stocks.