Markets quiet ahead of monetary policy review

June 16th, 2011 - 11:36 am ICT by IANS  

Sensex Mumbai, June 16 (IANS) Indian equities markets were trading subdued in Thursday morning trade as traders were watchful ahead of the mid-quarter monetary policy review by the Reserve Bank of India (RBI), which is largely expected to raise key interest rates.

Analysts are largely of the view that the RBI will raise interest rates by 25 basis points on Thursday as inflation continues to reign high.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE), which opened at 18,060.11 points, was ruling at 18,069.23 points — down 63.01 points or 0.35 percent from its previous close at 18,132.24 points.

The 50-scrip S&P; CNX Nifty of the National Stock Exchange was also trading in the red at 5,418.6 points, down 0.59 percent.

Latest data released Tuesday by the commerce and industry ministry showed inflation, as measured by the wholesale price index, at 9.06 percent in May, much higher than 8.66 percent in the previous month.

The inflation figures for March were revised upwards to 9.68 percent from the previously estimated 9.04 percent.

The RBI has hiked interest rates nine times since March 2010 and said that it would not shy away from more tightening in the coming months if inflation does not come down.

Broader markets were also weak, with the BSE midcap index down 0.47 percent and the BSE smallcap index trading 0.25 percent lower.

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