The Indian markets opened flat after the RBI chief said inflation was high, belying hopes of a rate cut this month, a factor that had boosted the market over the past two days.
The BSE Sensex opened down 21 points at 19965, and the Nifty down 6 points at 6050
The RBI chief was quoted by Bloomberg as saying that inflation was still high and there was no room for monetary stimulus.
"When growth is slowing down you can stimulate the economy either by monetary easing or by fiscal stimulus, but both monetary and fiscal side have no room for stimulus. So that is the big concern," Subbarao was quoted as saying by Bloomberg.
On Tuesday, the Sensex topped the 20,000-mark for the first time since January 7, 2011, touching an intra-day high of 20,036.82, before settling at 19990.08 on expectations of a rate cut in January.
Stocks in news
Shares of Spicejet were down 2% after the company clarified that though few investors have evinced interest in the company p, it will be very pre-mature to comment on the possibilities of any fresh equity issuance to such interested parties or confirm/deny names of any specific entity.
Essar Oil rose 2.61% to Rs 74.70 after the company reported net profit of Rs 32 crore for Q3 December 2012, as against net loss of Rs 362 crore in Q3 December 2011.
Meanwhile, the Asian markets are mixed. Japanese stock market saw a halt in its recent rally after the yen saw some appreciation after days of declines. US indices were lackluster as investors refused to commit funds waiting for corporate earnings. The Dow Jones and S&P 500 closed up between 0.1% and 0.2%. The Nasdaq dipped 0.2%.
The World Bank has sharply cut its 2013 outlook for the world economy to 2.4% from its last forecast in June of 3%.
Petrol price was hiked by about 35 paise per litre.
SEBI has sought fresh clarifications from global liquor giant Diageo regarding its Rs54.41bne open offer for stake purchase in UB group’s United Spirits — a development that could further delay the closure of this deal.