The BSE Sensex and the NSE Nifty shed most of their morning gains by the close on Tuesday. The Sensex was at 21,832.61, up 0.10 per cent or 22.81 points at close. The Nifty also ended up 0.19 per cent or 12.45 points at 6516.65.

The Maruti share held firm even as the auto sectoral index slipped into the red by close. The share was up 7.58 per cent at close on the BSE. SBI, Coal India, ITC, Bajaj Auto and Reliance Industries all rose up to 3 per cent by close. Tata Motors, M&M, Wipro, Infy, L&T and ICICI Bank were the laggards in the session.

The BSE sectoral indices ended mixed with FMCG (up 1.84 per cent) and power (1.27 per cent) the big gainers. Oil and gas, consumer durabales, metals and banking all gained up to one per cent. The IT and technology indices were the major losers during the day.

According to an Equentis Market Outlook report, the financial year closure on March 31 and a pre-election rally are expected to rule market outlook. “Slowing inflation and a positive IIP has increased the probability of a rate cut from RBI in the near term. RBI’s rate cut could lead the market and banking sector into a fresh buying zone,” the report added.

Volatility was up 3.46 per cent and the Volatility Index India Vix was quoting at 17.

Asian shares rebounded as Japanese stocks gained on a weak yen and data from the US that indicated industrial production growth in February was the highest in six months. Japan's Nikkei, Hong Kong's Hang Seng index, Australia's ASX 200 and the Shanghai index ended up.

The market has its eyes on the Federal Reserve, which is to discuss monetary policy at a two-day meeting beginning today.

The US Fed has indicated that it is likely to reduce the pace of bond purchase again, impacting global markets, including India. The US Fed has started reducing the pace of its stimulus by $10 billion every month.

"Global/emerging markets and investors fear that after a US Fed rollback global investors may reallocate investments to US dollar and equities. Bond-buying becomes important in the backdrop that the Fed's bond-buying programme has been a source of liquidity for most Asian and emerging markets this year,” the Equentis report said.

(This article was published on March 18, 2014)
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