Sensex, Nifty flat ahead of Fed meet; IT stocks under pressure

Moneycontrol Bureau11:45 am RBI's norm on debt restructure: The Reserve Bank of India on Tuesday announced a new scheme to restructure corporate debt which will benefit companies with unsustainable debt. Varinder Bansal of CNBC-TV18 analyses a few companies that may get the stick on account of poor interest coverage ratios.The framework, termed Scheme for Sustainable Structuring of Stressed Assets, envisages determination of the sustainable debt level for a stressed borrower, and bifurcation of the outstanding debt into sustainable debt and equity/quasi-equity instruments which are expected to provide upside to the lenders when the borrower turns around.Thus, a bank can split the 'sustainable' and 'unsustainable' debt portions of a firm, making provisions for each separately, and converting the sustainable levels of debt into equity or quasi equity instruments. However, the sustainable proportion of debt must not be less than half the loans of a company.11:30 am Piping hot: Assam tea prices have hit a record price of Rs 501 per KG. This trend, says Kamal Baheti, Chief Financial Officer (CFO), McLeod Russel, will continue into the peak productions months (between July and October). This will lead to a rise in margins to 13-14 percent in FY17 as against 8.6 percent in the previous year.The tea companies have seen their costs rise over the last two years. This increase in costs is led by hikes in wages, says Baheti.CS Bedi, Managing Director, Rossell India, agrees with Baheti, but also adds that increasing tea prices will give some relief to tea companies. He expects tea prices to go up by 10 percent in FY17.  Don't miss: For pizza lovers! Wheat price, fewer stores may hurt Domino's owner

The market is flat as investor are on edge ahead of two-day Federal Open Market Committee starting tonight. Analysts are not expecting any change in rates but but the central bank may tweak its view on the economy or make changes to its interest rate forecast, when it releases its statement and economic forecasts.

The Sensex is down 22.05 points at 26374.72, and the Nifty is down 9.80 points at 8100.80. About 1421 shares have advanced, 638 shares declined, and 97 shares are unchanged.

Adani Ports, SBI, Tata Motors, GAIL and Cipla are top gainers while HDFC, Bajaj Auto, Infosys, TCS and Asian Paints are losers in the Sensex. IT stocks are under pressure.

Oil prices fell more than onepercent in Asia, extending a sell-off on speculation about a pick-up in production while world markets are rattled by fears over Britain's possible exit from the European Union.

After a rally in the commodity that saw the US benchmark hit an 11-month high last week, investors are beginning to cash in and search out safe havens such as the yen and gold. Equities markets around the world have been tumbling since late last week on worries about the global economy and central banks' ability to provide support.