Sensex, Nifty flat ahead of RBI policy; Ranbaxy loses 5%

Moneycontrol Bureau
Live Market Commentary

10 am: Buzzers: Shares of Axis Bank and HCL Technologies gained more than 2 percent as Foreign Investment Promotion Board (FIPB) cleared proposals of these companies to increase FII investment limit.
In case of Axis Bank, the board approved proposal to raise foreign shareholding limit to 62 percent from 49 percent earlier.
The bank had sought for increase in FDI limit after foreign investment in the bank reached to 49 percent. 9:45 am FII view: US Federal Reserve's move of continuing with the monetary stimulus triggered a huge rally across global markets. Majority of investors were expecting a modest reduction in monthly purchase of bonds, but zero taper decision has surpised emerging market investors, Michael Kurtz, Global Head of Equity Strategy & Chief Strategist, Asia Ex-Japan, Nomura said.
Economies grappling with huge current account deficit (CAD) like India, this relief is temporary and this liquidity powered rally may be short-lived , he told CNBC-TV18 in an interview. The next key event for Indian market would be RBI governor Raghuram Rajan’s debut monetary policy, scheduled tomorrow. Kurtz feels Fed decision’s gives the apex bank room to reverse some tightening and it may unwind some short-term liquidity measures. 9:30 am Movers and loers: Tata Power, NTPC, M&M, BHEl and HDFC are top gainers in the Sensex. The laggards are Sesa Goa, L&T, Tata Motors, Jindal Steel and Hindalco.
Ranbaxy loses another 5 percent as  its only drug making facility, US-based Ohm Laboratories, is learnt to be under surveillance of the US Food and Drug Administration (FDA). Don't miss: Fed move may have set stage for deeper correction in market
The market has opened lower as investors seem to be cautious ahead of the RBI monetary policy review to be announced today at 11am. The Sensex is down 25.59 points or 0.12 percent at 20621.05, and the Nifty is down 10.90 points or 0.18 percent at 6104.65. About 214 shares have advanced, 112 shares declined, and 29 shares are unchanged.
Reserve Bank Governor Raghuram Rajan will be announcing his first credit policy. Most market analysts are expecting the central bank to scale back the liquidity tightening measures announced in July.
Meanwhile, the Indian rupee opened with a marginal loss of 22 paise at 62.05 per dollar ahead of RBI policy against 61.78 on Thursrday.
Himanshu Arora, Religare said, "Dollar is likely to continue its slide which may attract foreign funds into the country, pushing rupee higher. In the wake of the Fed's recent move, RBI may rollback its cash tightening measures to support the rupee. RBI is expected to keep the policy rate and the CRR unchanged. The range for the day is seen between 61.20-62.10/USD."
The dollar recovered a tad but gains are limited on continued low interest rates in the US. The euro continues its good run at 1.35/USD and the yen trades at 99.58/USD.
The Wall Street party takes a breather as the Dow, S&P snap 4-day rally as the Fed euphoria on the tapering of quantitative easing fizzles.
Asian equities open weak in thin trade as China, HongKong, South Korea and Taiwan markets are shut for trade today.
In commodities, crude prices slide on comments from the Iranian president seeking better relations with the West and also as Libyan crude production gets back on track.
From precious metals space- gold prices rallied nearly 5 percent higher and hit 1-week highs on the Fed surprise, although giving up some gains in early trade this morning.