Volatile Sensex closes 114 pts down ahead of Fed meet outcome

The benchmark Sensex today frittered away early gains and closed 114 points down at 28,622.12 as investors adopted a cautious stance ahead of Fed's monetary policy statement that could signal the timing of US rate hike.
While the Fed is not expected to announce any hike in rates tonight after its two-day policy meeting ends, markets are bracing for a hike that may be just a couple months away.
IMF chief Christine Lagarde has warned of a repeat of high market volatility and capital outflows when US Fed hikes rates next time and has asked India and other emerging markets to be prepared for such an eventuality.

The BSE Sensex resumed higher at 28,766.87 and firmed up further to 28,806.97 on initial strong buying on the back of good foreign capital inflows.
Traders are keeping a close eye on what the US central bank has to say about its near-term plans after a recent mixed bag of economic data.
The Sensex dropped afterwards to 28,546.76 on fresh selling before concluding at 28,622.12, showing a loss of 114.26 points of 0.40 per cent. Yesterday, it had rallied nearly 299 points on speculation Fed wont's hike rates soon.

"Participants' remained on sidelines ahead of the Fed outcome. Sentiments was dampened after IMF chief comments' on risks to market stability in emerging economies after a US rate hike," said Jayant Manglik, President-retail distribution, Religare Securities.

Shares of Tata Motors dropped by 2 per cent on profit-booking after the firm reported growth of 5 per cent in global sales, including Jaguar Land Rover, for February.
Other major losers which also pulled down the Sensex include NTPC, BHEL, Wipro, M&M, ONGC, Bharti Airtel, HDFC, ITC, Hindalco, HUL, L&T, Bajaj Auto and Infosys.
The CNX 50-share Nifty also declined by 37.40 points, or 0.43 per cent, to finish at 8,685.90 today.
Globally, most Asian bourses closed up on hopes of further measures to stimulate the Chinese economy. Europe opened better ahead of British government's annual budget and the US Federal Reserve policy decision.

In currency markets, the dollar retreated as investors sat on the sidelines. In oil space, US benchmark West Texas Intermediate for April delivery eased to USD 42.5 level while Brent crude for May fell to USD 53.1 mark.