Monetary policy woes may weigh

Overnight fall in US and European indices coupled with subdued Asian markets in morning trades may weigh on the local indices in morning trades. Today Reserve Bank of India (RBI) will announce its monetary policy and expectations are that RBI may lower its inflation tolerance limit to 5% and increase the interest rate to curb inflation. The rapid appreciation of rupee against dollar is another cause of concern. However, the prevailing north-bound journey and decent earning numbers reported by number of companies in the past few sessions may add to the market advantage and help the sentiment turn positive. The Nifty could find support at 4030 and once it breaks and sustains below 4030, the Nifty can target 4000-3985 level, while the Sensex has a likely support at 13500 and may face resistance at 14050.

On the result front, HDFC Bank, Hexaweare, MTNL, Maruti Udyog are expected to announce their numbers.

US indices ended weak on Monday, with the Nasdaq sliding by three points to close at 2524 amid selling in technology stocks. Other factors like higher crude oil prices saw the the broader Dow Jones to slip 43 points at 12919.

Indian ADRs had a mixed outing on the US bourses. Tata Motors and Patni Computer gained over 2-3% while ICICI Bank, HDFC Bank, MTNL and VSNL were up around 1% each. However, Infosys, Satyam, Wipro, Dr Reddys and Rediff slipped ended in the red with steady losses.

Crude oil prices in the international market edged higher, with the Nymex light crude oil for June delivery rising by $1.78 at $65.89 a barrel. In the commodity segment, the Comex gold for June series fell $1.60 to settle at $694.20 an ounce.