Indian benchmark indices continue to tumble as investors wait for the outcome of the MPC meeting that began on 5th December and will be concluded on 7th December.

BSE Sensex continues to trade 250-300 points lower after opening at 62,395 points and NSE Nifty-50 also remains well below the 18,700 mark after opening at 18,600 points. SGX Nifty, an index that opens before the Indian stock market and sets the tone for the likely performance of the Indian stock market, was trading down 105 points, or 0.6%, early morning today.

Bombay Stock Exchange building BSE
Indian benchmark stock market indices ended with gains of about 1.80 percent on Monday. In Picture: A man walks past the Bombay Stock Exchange (BSE) building in Mumbai Dec. 5, 2013.Reuters file

Prashanth Tapse, Research Analyst and Senior VP (Research) at Mehta Equities warns investors of some choppy trading. He said, "Indian equities are likely to decline in early Tuesday trades on the back of overnight slump in US markets and subsequent weakness in Asian indices. Last Friday's hotter-than-expected US jobs report added to concerns that the Federal Reserve might need to be even more aggressive in its battle against inflation, despite concerns about a looming recession."

The better-than-expected US nonfarm payroll data may be good news for the economy but it can be negative for the market and may trigger a selloff as it indicates no sign of easing inflation to the Fed. The market momentum worldwide is likely to stay sluggish in a bid that Fed may not stay as dovish as it sounded before on its monetary stance and may hike interest rates by more than half a percentage in its upcoming Federal Open Market Committee (FOMC) meeting on December 13th and 14th.

sensex

Meanwhile, investors are closely following the ongoing MPC meeting. Mohit Nigam, Fund Manager & Head at PMS, Hem Securities, said, "Investors are waiting for the conclusion of the RBI Monetary Policy Committee meeting before making any significant movements. The conclusion of the conference will be made public on 7th December. It is predicted that the Reserve Bank of India MPC would announce a rate rise of 35 basis points (bps)."