Sensex flat; all eyes on RBI move; RIL up, UB shares tumble

Indian shares ended almost flat after a lacklustre trading today, as a cabinet reshuffle by the scam-ridden United Progressive Alliance government failed to enthuse investors a day ahead of the central bank’s policy review.

The market, however, showed resilience despite a disappointing set of earnings and a weak European market as hope of a rate cut by the Reserve Bank of India floated after the Finance Minister unveiled a fiscal consolidation roadmap.[caption id=“attachment_506798” align=“alignleft” width=“380”]  Flat day at the Sensex. Reuters[/caption]

The Sensex closed 0.06 percent up at 18635.82 and the Nifty 0.02 percent at 5665.60.

Investors and corporates are keeping their fingers crossed as the Reserve Bank of India reviews its policy tomorrow.

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The government today announced its fiscal consolidation roadmap and vowed to bring down fiscal deficit to 3 percent of GDP by 2016-17 from an estimated 5.3 percent this year.

It sees this year’s current account deficit at 3.7 percent of GDP.

After announcing the fiscal consolidation roadmap, Finance Minister P Chidambaram expressed hopes that the central bank will take note of the government’s efforts.

The RBI has time and again asked the government to take corrective measures to bring its fiscal condition back on track. The finance minister’s comments have given rise expectation of a 25 basis point rate cut on Tuesday.

The rate-sensitive sectors such as realty and banks were jittery, though.

Stocks in news

Reliance Industries was up 1.5 percent after Veerappa Moily took over the oil ministry from Jaipal Reddy, who was seen as a key reason for delay in taking policy decisions. The change of guard is widely expected to be in favour of RIL.

UB group companies, United Spirits and United Breweries Holdings, tumbled around 9 percent each after chairman Vijay Mallya said he was doubtful whether a deal with Diageo to sell United Spirits stake would fructify.

Bank of India declined 2.5 percent after the bank posted a lower than expected earnings.

Bhel too fell more than 6 percent after the company’s earnings came in below expectations.