Sensex today is expected to move in a tight range early, ahead of the central bank's rate decision due around 11 a.m.

Late on Monday, the Reserve Bank of India said the growth outlook and business climate have weakened but warned of upward risks to inflation, reinforcing expectations it will keep interest rates on hold.

The market could hold on till monetary policy. If the Reserve Bank maintains status quo, it could be taken negatively, said Ambareesh Baliga, chief operating officer, Way2Wealth Securities.

There are hopes for a CRR cut. Banks have rallied in the past two weeks. If there are no steps, then we may see some pressure, he said.

CRR, or cash reserve ratio, is the proportion of deposits that commercial banks must keep with the RBI.

Reliance Industries may fall after the country's upstream regulator saidgas output from the company-operated D6 block could fall below the current 38-39 million cubic metres a day (mmscmd), under half of the estimated peak rate of 80 mmscmd.

Many Asian markets were closed on Tuesday in observance of the Lunar New Year holidays, but Japan's Nikkei rose on hopes that a Greek debt deal can still be reached even after European finance ministers rejected an offer by Greece's private creditors.

At 0242 GMT, the Nikkei was up 0.37 percent, while the Nifty India stock futures in Singapore were up 0.26 percent.

On Monday, the 30-share BSE index inched up 0.8 percent, helped by financials while Reliance Industries dropped after reporting its first quarterly profit fall in two years.

STOCKS TO WATCH

* Newspaper publisher DB Corp is expected to fall after it posted a nearly 29 percent drop in December quarter net profit.

* Private-sector lender Federal Bank is likely to rise after its December quarter net rose more than 41 percent and asset quality improved during the period.

* Shree Cement may open higher after its December quarter net more than doubled.