Indian shares may pause before policy review

MUMBAI, Oct 30 (Reuters) - Indian shares may be a little cautious on Tuesday morning due to lower Asian markets and ahead of the central bank's policy review, although confidence in the market is high after the index topped 20,000 for the first time.

The record-setting market has hit a record high in 21 of the past 28 sessions.

Top oil and gas producer Oil and Natural Gas Corp (ONGC.BO: Quote, Profile, Research) is forecast to report its September quarter net profit rose 14.8 percent, [ID:nBOM249800] and state-run Steel Authority of India Ltd (SAIL.BO: Quote, Profile, Research) is seen reporting a 14.3 percent rise in net profit [ID:nBOM131779] on Tuesday.

"We will see a lot of volatility in the market today and some sort of profit-booking is on the cards," said Sejal Doshi, chief executive at Finquest Securities.

"Everybody is watching the outcome of today's (central bank) meeting," he said.

Moderating inflation is expected to see the Reserve Bank of India hold interest rates steady when it releases its policy review at noon (0630 GMT). None of the 11 analysts polled by Reuters expect a change in short-term rates, and only three expected a rise in banks' reserve requirements. [ID:nBOMB129639]. India's benchmark 30-share BSE index .BSESN rose 3.82 percent on Monday to a record close of 19,977.67 points, after hitting a record high of 20,024.87 in late trade.

The index has now risen 27.5 percent since a U.S. rate cut on Sept 18, and nearly 43 percent -- or almost 6,000 points -- since its weakest close during the subprime crisis in August.

Most Asian markets were lower ahead of the U.S. Federal Reserve's two-day meeting that starts later on Tuesday. The Fed is widely expected to cut its target funds rate by at least 25 basis points to 4.5 percent.

At 0325 GMT, Tokyo .N225 was down 0.7 percent, Seoul .KS11 had lost 0.5 percent and Sydney 0.4 percent.