Volatility to the fore

Volatility ruled the roost as key benchmark indices regained positive terrain after slipping into the red for a brief period in mid-afternoon trade. At 14:17 IST, the barometer index, the S&P BSE Sensex, was up 60.86 points or 0.25% at 24,546.81. The 50-unit Nifty 50 index was currently up 15.20 points or 0.2% at 7,451.35. The Sensex fell 25.03 points or 0.1% at the day's low of 24,460.92 in mid-afternoon trade. The barometer index rose 159.75 points or 0.65% at the day's high of 24,645.70 in early trade. The Nifty shed 16.45 points or 0.22% at the day's low of 7,419.70 in morning trade, its lowest level since 22 January 2016. The index rose 41.75 points or 0.56% at the day's high of 7,477.90 in afternoon trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,300 shares gained and 1,123 shares fell. A total of 170 shares were unchanged. The BSE Mid-Cap and Small-Cap indices were currently up 0.23% each. Both these indices underperformed the Sensex.

In overseas stock markets, European stocks edged lower as investors remained cautious ahead of the US Federal Reserve's policy statement due later in the global day. Asian stocks edged higher after better-than-expected corporate earnings triggered rally in US stocks overnight. In mainland China, the Shanghai Composite index staged a strong intraday rebound. The index ended with losses of 0.52%. The index dropped as much as 4% earlier in the session. US stocks ended sharply higher yesterday, 26 January 2016, as energy stocks soared amid a rebound in oil prices.

Meanwhile, the Federal Open Market Committee (FOMC) is widely expected to keep US interest rates unchanged after the conclusion of a two-day monetary policy meeting today, 27 January 2016. Investors are awaiting the Fed's policy statement for the US central bank's comments on global risk factors such as falling oil prices and economic slowdown in China.

Pharma stocks were mixed. Sun Pharmaceutical Industries (up 0.72%), Cipla (up 0.09%), Dr Reddy's Laboratories (up 1.59%), Divi's Laboratories (up 2.57%), and Cadila Healthcare (up 0.4%) gained. Alkem Laboratories (down 1.1%), Lupin (down 0.48%), Wockhardt (down 0.41%), and Glenmark Pharmaceuticals (down 1.4%) declined.

PSU OMCs rose after Oil Minister Dharmendra Pradhan was quoted as saying that PSU OMCs will invest Rs 1.5 lakh crore in setting India's biggest refinery in Maharashtra. Indian Oil Corporation (IOCL) (up 1.42%) and HPCL (up 1.23%) gained. BPCL fell 0.6%. Engineers India declined 0.41%. Pradhan was quoted as saying that IOCL will build a 60-million tonne a year oil refinery in Maharashtra along with BPCL, HPCL and Engineers India on the West coast. The refinery will produce petrol, diesel, liquefied petroleum gas (LPG), aviation turbine fuel (ATF) and feedstock for petrochemical plants in plastic, chemical and textile industries in Maharashtra, Pradhan reportedly said. The Maharashtra state government and the Ministry of Petroleum and Natural Gas will closely work for early identification of land for refinery and finalisation of details of project, Pradhan reportedly said.

Shares of oil exploration firms were mixed. ONGC (up 0.23%) and Oil India (up 0.27%) gained. Reliance Industries (RIL) (down 0.06%) and Cairn India (down 0.67%) declined.

In the global commodities market, Brent for March settlement was currently down 70 cents at $31.10 a barrel. The contract had risen $1.30 a barrel or 4.26% to settle at $31.80 a barrel during the previous trading session.

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