The Indian equity market closed largely flat on Tuesday as banks underperformed, a day ahead of the outcome of Reserve Bank of India’s monetary policy review meeting. The RBI’s Monetary Policy Committee may maintain the status quo on Wednesday as the rupee saw a major appreciation, tracking a substantial dip in global crude oil prices since the last policy statement in October.

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The 30-share BSE benchmark index, the Sensex closed 107 points lower at 36,134, while the broader 50-share NSE Nifty50 slipped by 14 points in the red at 10,870. HDFC, HDFC Bank, M&M, SBI and Reliance Industries dragged indexes, while the support for the bulls came from Infosys, TCS, HCL Technologies along with ICICI Bank.

HDFC Bank contributed nearly 70 percent fall in Nifty Bank’s decline with the bank index settling 164 points lower at 26,694. Midcap index slipped 41 points lower to 17,589, keeping market breadth mildly in favour of declines with NSE Advance-Decline ratio at 1:1.

Shares of Hindustan Unilever ended lower despite positive brokerages’ views, a day after the FMCG major announced its merger with GSK Consumer. Deutsche Bank upgraded the stock to ‘buy’ from ‘hold’ with a target price of Rs 2,100 from Rs 1,800 per share. It expects margin to be EPS accretive by 5 percent in FY20.

Macquarie has an ‘outperform’ rating with target being raised to Rs 2,086 from Rs 1,870 per share.

A day after holding investor call, shares of Sun Pharma failed to hold on to opening gains. The stock slipped 5 percent from the day’s high to end the session 3 percent in the red.

Yes Bank also slipped back in the negative territory after gaining for two consecutive sessions. Tata Motors closed at day’s low but in the green after reporting a 19 percent jump in US JLR sales for November.

In the derivatives segment, major traction was seen in Nifty 10,600 Put option that added 2.4 lakh shares in the open interest with premium slipping 2 percent.

And, on the call side, Nifty 10,900 option added nearly 1 lakh shares in the open interest with premium slipping 9 percent. Nifty December Futures closed with a premium of 34 points against a premium of 40 points on Monday.

Asian markets ended largely lower amid uncertainty over the contents of the Trump-Xi deal in the US-China trade tariff war. Japan’s Nikkei 225 fell by 2.39 percent to close at 22,036.05, while the Topix index shed 2.36 percent to 1,649.20.

In South Korea, the Kospi slipped 0.82 percent to close at 2,114.35, while Hong Kong’s Hang Seng index slipped 0.3 percent.

Elsewhere, the mainland Chinese markets, which have been closely watched in relation to Beijing’s trade war with Washington, bucked the overall downtrend to see gains.

The Shanghai composite rose 0.4 percent to close at around 2,666 and the Shenzhen composite advanced 0.4 percent to finish the trading day at about 1,387.49.

Over in Australia, the ASX 200 fell 1 percent to close at 5,713.10, with almost all sectors lower on the day.

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