Stocks end flat ahead of Fed meet

Frontline shares ended flat after a volatile session Tuesday swayed by mixed global cues, while tier II and share III remained under pressure. Indices edged lower at the start of the day tracking declines in its Asian peers, but shrugged early losses amid speculation the US Federal Reserve will lower interest rates by 100 basis points later this evening.

The Bombay Stock Exchange’s Sensex rose to a high of 15,169.61 from a low of 14,677.24, and finally settled at 14,833.46, up 24 points or 0.16 per cent over Monday’s close.

The National Stock Exchange’s Nifty finished 30 points or 0.66 per cent higher at 4533. Intraday, the index rose from a low of 4468.55 to a high of 4617.95.

“The core issue is the lack of liquidity and conviction in our market. There is hardly any value buying after the market falls. It is only day traders who are entering on dips and selling at every rise, unsure of whether gains will be sustained. Also, with the market closed on Thursday and Friday, traders are reluctant to carry over positions. Unless foreign institutions and HNIs start buying aggressively, one cannot be convinced of any upmove,” said Suresh Kumar Iyer, technical analyst at Asit C Mehta Investment Interrmediates.

Apart from uplifting global cues, fourth quarter advance tax payments from corporate India also cheered investors. Going by the numbers, fourth quarter earning should pleasantly surprising for the market.

But the benchmarks posted gains spear headed by the likes of DLF (up 5.3%), Hindustan Unilever (3.8%), Ranbaxy Laboratories (3.4%), Tata Consultancy Services (3.17%) and Reliance Energy (3.09%), secondline stocks were subdued. With the blue chips having corrected about 20 per cent from January highs, investors shied away from the mid-caps.

The BSE Mid-cap Index ended 1.48 per cent lower, while the BSE Small-cap Index lost 2.09 per cent. The exchange saw 2734 shares change hands with 749 gainers and 1918 losers.

Later this evening, all eyes will be on Fed Chairman Ben Bernanke, who is widely expected to lower interest rates by 75-100 basis points. If he does as expected, one could expect a rally Wednesday.

Source : The Economic Times