Indian benchmark indices opened at fresh highs. The BSE Sensex opened at 31,420.85 while the Nifty opened for the first time above 9,700.
"As Nifty surpasses initial resistance we may see 9800 as a mark to be tested," says Mustafa Nadeem, CEO, Epic Research adding "This is the broader range for market. We recommend to have buy on dips strategy in coming sessions."
At 9.35 am, the Sensex was trading 5 points down while the Nifty was trading 6 points lower.
Market was trading flat on the back on global cues as investors took in the impact of 6 countries cutting diplomatic ties with Qatar.
"The Tuesday's session is likely to trade with some volatility on the back of RBI monetary policy. Price-wise, we do not expect any positive surprise from this event and hence, any disappointment may lead to some profit booking in the market. 9,640 - 9,581 would act as a strong support zone on Nifty today," said an Angel Broking report.
Sectoral indices led by IT, Teck, Auto, Realty, Metal, Healthcare, PSU and Banking were in the positive zone, rising up to 1.83 per cent.
Brokers also said that markets got a booster dose after the GST Council last week finalised rates for some pending commodities, which has now taken the rollout of the new indirect tax regime from July 1 a step closer.
Among the top gainers was Tata Consultancy Services trading over 3 per cent on the Sensex followed by Infosys and SBI.
Yesterday, State Bank of India opened share sale through private placement at Rs 287.58 apiece to raise Rs 11,000 crore.
This is part of plans to garner Rs 15,000 crore capital from markets in the current fiscal.
Among the laggards was ITC, dipping over 2 per cent.
Shares of Cipla, too, fell 1.92 per cent as Pharma woes continue to damper investor sentiment.
Reserve Bank of India's MPC meet
Reserve Bank of India's Monetary Policy Committee (MPC) is scheduled to commence later in the day to review monetary policy amid slowdown in growth and declining inflation.
BofA-ML expects the committee to consider a 25 bps cut in interest rates on August 2 if monsoon remains normal.
Goods and Services Tax
Speculation over the Goods and Service Tax rate on gold and diamond Jewellery is finally over with the government finalizing the rate at 3 per cent, while the import duty of 10 per cent stays, which will be over and above the 3 per cent.
The total levy on gold would be around 13 per cent (10 per cent customs duty + 3 per cent GST), effectively an increase of around 1 percent than the industry expectations of the 12 percent.
"This would result in an increase in jewellery prices of gold, silver, and diamonds, however marginal it will be. This additional cost will be passed on to the consumers," says Chief Analyst, Prathamesh Mallya from Angel Broking.