Markets volatile ahead of FOMC outcome

Sensex marginally up by 19 points at 19,823 while Nifty hovers around 5,853

Markets have turned volatile in morning deals as investors will be counting on the Federal Reserve to launch only a modest scaling back of stimulus later in the day.

At 1055 hrs, the Sensex was up 19 points at 19,823 and the Nifty was flat at 5,853.

The gains were aided by Reliance Industries, ITC and HUL.

In the broader markets, the mid and smallcap indioces advanced and was up 0.3-0.5%.

On the sectoral indices, IT, Power and Auto indices were the only indices in the negative.
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After opening marginally higher, the benchmark indices slipped into the red owing to weakness in heavyweights like HDFC, HDFC Bank and Infosys. At 0940 hrs, the Sensex was down 13 points at 19,791 and the Nifty shed seven points to trade at 5,843.

The rupee was trading strong against the dollar in early trades due to dollar sale by foreign banks.

At 0935 hrs, the rupee was trading at Rs 63.25 compared with previous close of Rs 63.37 per dollar.

Overnight, U.S. stocks advanced on expectations the Federal Reserve will make only moderate changes to its stimulus that has been highly supportive of stocks and other assets at the conclusion of its two-day meeting.

The policy-setting Federal Open Market Committee began meeting on Tuesday to discuss whether to trim its bond purchases, or quantitative easing.

The Dow Jones industrial average rose 0.23%, to 15,530, the S&P 500 gained 0.42%, to 1,705 and the Nasdaq Composite added 0.75%, to 3,746.

Meanwhile, Asian markets held their breath as caution ruled in stock markets, with MSCI's broadest index of Asia-Pacific shares outside Japan flat at 464.14 while Japan's Nikkei firmed by 1.8%.

In the broader markets, the mid and smallcap indices started higher by 0.3% each, outperforming the BSE benchmark index, which was up 0.2%.

Sectors & Stocks

On the sectoral front, IT, Teck and Bankex indices started in the red, losing 0.04-0.2%.

Among the ones in the green, Consumer Durables and Realty indices gained 1% each. Metal, Auto, FMCG, Capital Goods, PSU, Power and Oil & Gas added 0.2-0.7%.

The top gainers among the Sensex-30 were Cipla, Dr Reddys Lab, Hindustan Unilever, Jindal Steel, Coal India, SBI and Hindalco which gained 1-1.5%.

Tata Motors, Tata Power, ICICI Bank, Bajaj Auto, ITC, Maruti Suzuki, L&T, Wipro and NTPC, up 0.5-0.8% were the other notable gainers.

Among the losers were HDFC, HDFC Bank, Mahindra & Mahindra and Sun Pharma down 1-2%.

BHEL, Gail India, Infosys, Tata Steel and ONGC down 0.1-0.4% rounded off ten losers list.

Shares of jewellery companies were trading higher after the government increased the customs duty on gold and silver jewellery by five percentage points to 15% to protect the domestic industry.

Titan Industries, Tribhovandas Bhimji Zaveri (TBZ), PC Jeweller, Gitanjali Gems, Shree Ganesh Jewellery House (India) and Goenka Diamonds are up between 1-7% on the BSE.

The market breadth was positive. 595 stocks advanced while 417 stocks declined on the BSE.