Indian shares retreated on Tuesday from four-month highs hit in the previous session as investors stayed on the sidelines ahead of the central bank’s policy meeting. Analysts expect the Reserve Bank of India to cut the repo rate by 25 basis points on Wednesday after December inflation hit a two-year low. But they warn it will be a close call since the central bank may even opt to maintain status quo until its next review in April.

The RBI may keep rates unchanged as it continues to assess the impact of the crackdown on high-value notes on inflation, some analysts said. Most automakers were down, contributing to over three fourths of NSE index’s decline, with Tata Motors Ltd and Mahindra & Mahindra Ltd falling as much as 2.4 per cent and 1.7 per cent respectively.

Ashok Leyland fell 1.4 per cent, Bosch 0.78 per cent and Bharat Forge 0.70 per cent. Maruti was the sole gainer on the auto indices on both the BSE and the NSE. Banks have already slashed lending rates this year after deposits surged following the ban on high-denomination currency notes, reducing the need for further rate cuts.

The broader NSE index was down 0.41 per cent or 35.90 points at 8,765.15 at about 2.30 pm while the benchmark 30-stock BSE index was trading 0.49 per cent or 139.89 points lower at 28,299.39. Tata Motors, Reliance Industries, ICICI Bank and Coal India

MARKET MEASURE

EXCHANGE ADVANCE DECLINE UNCHG. T/O
NSE 632 887 79 24003.27

CHART ANALYSIS
SCRIP R2 R1 PIVOT S1 S2
NIFTY 50 8847 8815 8786 8760 8720