The Reserve Bank of India's decision to leave policy repo rate unchanged at 6.50 percent had a subdued effect on stock markets in the immediate, with the Bombay Stock Exchange (BSE) Sensex losing about 40 points.
The 30-scrip index was trading at 28,145 at around 11.28 a.m. The National Stock Exchange (NSE) Nifty 50 was down 15 points at 8,697.
Top Sensex losers were HDFC, Adani Ports and ITC while the gainers included NTPC, Coal India and ONGC.
Bank stocks were trading with small gains, with SBI up 0.71 percent and ICICI Bank at 0.61 percent. PNB, Bank of Baroda and Axis Bank were the other bank stocks that were trading with gains. The BSE Bankex was up 0.25 percent at 21,710 at around 11.32 a.m.
Earlier in the day, markets opened on a cautious note, with the benchmark index gaining about 100 points. It slipped shortly and was trading with losses of about 50 points. Top Sensex losers included ITC, HDFC and Adani Ports.
Brokerage Angel Broking said that markets would be keenly observing the RBI's monetary policy statement. Despite the index gaining about 100 points on Monday, bank stocks remained cautious.
"All eyes are on the monetary policy meeting, the last policy meet by Dr Raghuram Rajan," Angel Broking said in a note issued on Tuesday.