Sensex, Nifty trade on volatile note amid geopolitical worries; all eyes on RBI now

NEW DELHI: Benchmark indices opened higher on Wednesday but soon turned volatile amid geopolitical tensions between the US and China after the former's House speaker Nancy Pelosi visited Taiwan, which the latter claims as its breakaway province, despite warnings.

Investors were also cautious ahead of the kick start of the three-day RBI policy review later in the day.

At 9.22 am, the BSE Sensex was trading 87.24 points or 0.15 per cent higher at 58,223.60. Nifty50 was trading at 17,360.40, up 14.95 points or 0.09 per cent. The midcap and smallcap indices edged up to 0.20 per cent each.

"China’s response to Pelosi’s trip to Taiwan could have an impact on supply chains and demand, which could keep the inflationary pressures going strong. Traders are starting to bet that the Fed won’t take rates much above neutral" said Edward Moya, Senior Market Analyst, The Americas OANDA.

Among Sensex stocks, Infosys gained 0.9 per cent to Rs 1,556.95. HCL Tech, Tech Mahindra and Hindustan Unilever rose 0.75 per cent, 0.65 per cent and 0.46 per cent, respectively.

Bajaj Finserv, Wipro, Axis Bank, Bharti Airtel and Reliance Industries edged up to 0.4 per cent higher. Losers included M&M which fell 1.49 per cent to Rs 1,236.55. Kotak Mahindra Bank, Maruti Suzuki, ITC, IndusInd Bank and NTPC dropped up to 1.5 per cent.

Srikanth Subramanian, CEO-Designate, Kotak Cherry said, “The upcoming RBI policy is expected to resonate with the rate increase action taken by peer central bankers with the consensus between 35-50 bps hike getting acknowledged across the yield curve."

Subramanian said that the equity market seems to have discounted a 35-50 bps rise and hence a corresponding rate hike may not result in a big shock, especially on the back of good earnings and economic momentum.”

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