Nifty down ahead of RBI policy

Equity benchmarks tumbled more than half a percent in the opening trade following fall in global markets, reacting to Greek debt problems. Greece's prime minister offered to quit and make way for a national unity government.

Another worry for the market is likely hike in repo rates today by the RBI in its policy meeting. The Nifty still holds the 5400 level.

Credit policy review

All eyes will be on the Reserve Bank today as it will announce its mid quarter policy review today. RBI Governor is unlikely to take a pause on his anti inflationary stance. That's the consensus of a CNBC-TV18 poll of bankers and economists, entire 100% expect a hike in the repo rate by 25 basis points to 7.5%.

Credit policy review

Gold rises as inflation worries

Gold rose on Tuesday after a flurry of inflation data signalled a continued increase in price pressures, while this week's near-1% decline in the bullion price enticed some physical buying.

Renewed concern about Greece and its ability to fund itself remained on the boil, while US wholesale prices rose again in May and consumer spending staged its first drop in 11 months, fanning existing concern about the world's largest economy.

Chinese data earlier showed inflation in the world's second largest economy is running at its fastest pace in almost three years, giving investors an additional incentive to buy gold, which can act as a hedge against rising price pressures.

Nifty below 5500

Equity benchmarks were moderately lower in the opening trade amid choppy trade, following weak Asian cues. The market shrugged off positive US cues.The Nifty was struggling to hold the 5500 level. Technology, telecom, power and select banking stocks were on sellers' radar.

Dr Reddy's Labs fell nearly 2% on USFDA inspection in one of company's plants. Maruti Suzuki, Tata Motors, NTPC, Jaiprakash Associates, Infosys, Ambuja Cements, Reliance Communications, Bharti Airtel, ICICI Bank, SBI and Kotak Mahindra Bank were putting pressure on the market.

At 9:18 hours IST, the 50-share NSE Nifty was trading at 5,489, down 11 points and the 30-share BSE Sensex slipped 35 points at 18,273.

Banks, FMCG, infrastructure drive Sensex higher

Indian equity benchmarks were consistently trading with about half a percent gains amid volatility, supported by financial, FMCG, infrastructure, realty, steel, healthcare and telecom companies' shares. ONGC was the leading star on the Nifty, with rising more than 1.5%. TCS and Wipro gained close to 1% at 10:45 hours.

The 50-share NSE Nifty continued to hold the 5500 level. The index was trading at 5,510, up 28 points and the 30-share BSE Sensex gained 76 points at 18,342. The Nifty Futures were trading with 14 points premium.