Index heavyweights Reliance Industries and ITC were the top losers along with ICICI Bank and SBI
Markets erased intra-day gains to end flat after investors turned cautious ahead of the US Federal Reserve's decision on interest rate later today.
The S&P BSE Sensex ended down 16 points at 28,507 and the Nifty50 settled 1 point higher at 8,777. In the broader markets, BSE Midcap and Smallcap indices ended flat with mixed bias. Market breadth ended positive with 1405 gainers and 1323 losers on the BSE.
"It looks unlikely that the US Federal Reserve (Fed) would raise fed funds rate in its meeting tomorrow as the underlying economic data continues to indicate a mixed picture.
There are fears that a rate increase by the Fed could lead to large outflows from emerging markets (EM) & subsequent wobble in risk-assets could weaken emerging market currencies, lead to spike in EM bond yields & drop in EM equities.
Any such correction induced by external factors should be used as an opportunity to buy Indian equities with a medium-term perspective," said Ajay Bodke, CEO & Chief Portfolio Manager: PMS at brokerage firm Prabhudas Lilladher.
Foreign institutional investors turned net sellers after they sold equity shares worth Rs 1,147 crore on Tuesday, as per provisional stock exchange data.
The Bank of Japan at its policy meet today maintained the 0.1% negative interest rate on deposits from banks and financials institutions. Japan's central bank also said it would purchases of long-term government bonds with an incremental 80 trillion yen per year.
"The most striking features of BoJ’s meeting were the introduction of new long-term rate target and committing to maintain the target unless it exceeds the price stability target of 2% inflation. Not only this, BoJ keeps the doors open to expand monetary policy further by stating that the Bank could consider accelerating the expansion in the monetary base to lower the target for short-term and long-term interest rates," says Nikhil Gupta, Economist at Motilal Oswal Financial Services.
Meanwhile, the Cabinet today cleared merger of railway budget with general budget, that will end the 92-year long journey of separate budget for the railways. The cabinet has also given an in-principle approval for advancing of presentation of budget dates in Parliament from the existing last day of February.
Asian markets recovered from their intra-day lows post the announcement from the Bank of Japan. The benchmark Nikkei emerging as the top gainer up nearly 2%. Hang Seng was up 0.6% while Shanghai Composite was trading with marginal gains.
Gains were led by index heavweights Infosys and financials such as HDFC Bank, Axis Bank and HDFC.
Tata Motors ended up 0.4%. Tata Motors-owned British brand Jaguar on Wednesday launched the all-new XF luxury saloon with prices starting at Rs 49.5 lakh (ex-showroom, Delhi).
Other gainers include, HUL, Asian Paints and Bharti Airtel among others.
ICICI Bank ended 0.7% down. The initial public offering of its insurance arm, ICICI Prudential Life Insurance Corporation, was subscribed over 2 times after a lukewarm response when it had opened for subscription.
Other losers include, index heavyweights such as Infosys and ITC which lost 0.6%-1.2% each.
Among others, TeamLease Services gained 2% after the company announced that it will acquire Nichepro Technologies for an enterprise value of up to Rs 29.5 crore.
Bajaj Finserv gained 2.5% to Rs 3,175 marking its entry into the elite league of corporate entities with a market value of over Rs 50,000 crore.
Shares of the Amtek Group companies – Amtek Auto, JMT Auto, Castex Technologies and Metalyst Forgings – ended over 3% higher on the back of heavy volumes. Amtek Group has operations across forging, iron and aluminium casting, machining and sub-assemblies.
Monsanto India ended 2.2% higher after German pharma and chemical major Bayer group announced an open offer to buy up to 4.49 million shares representing 26% of the paid-up capital of the agrochemicals Company at Rs 2,481.60 per share.
Essel Propack ended up 5.5% after the company announced the acquisition of the remaining 75.1% share in Essel Deutschland Gmbh & Co. KG, Germany (EDG).
Photograph: Danish Siddiqui/Reuters