The key indices ended the volatile session near the day's highs underpinned by good buying in software and technology stocks. A sharp recovery in late trades helped the BSE's 30-share Sensex to snap the four-day losing streak on Wednesday. The markets started the day on a soft note led by negative cues from the Asian markets. China's move to hike reserve requirement ratio (RRR) by half a percentage point dampened market sentiment in trade across the globe. The benchmark indices bucked the global trend in late morning trades to enter the positive terrain. However, the key index again drifted lower on profit booking by investors at higher levels and remained lower till late afternoon trades. Markets witnessed sharp recovery in the late afternoon session to touch the fresh high for the day prompted by the positive European markets. Realty and metal stocks recouped their losses in late trades. Agriculture Minister Sharad Pawar's comments that the spiralling food prices of essential commodities are likely to start coming down in 8-10 days, boosted confidence among marketmen. Cement stocks surged in trade after some media reports suggested that manufacturers may raise prices by Rs 3-5 per 50 kg bag from the end of current week. IT majors -- TCS and Infosys Technologies -- touched their new 52-week highs during the session. Finally, the BSE Sensex advanced 87.29 points or 0.50% to close at 17,509.80, while the S&P CNX Nifty gained 23.55 points or 0.45% to end at 5233.95.

US markets closed in green on Wednesday, the markets remained choppy for the large portion of trade but the advances in the financial and IT stocks lead to the close of gains for major indices. The day marked with the first meeting of the bipartisan, 10-member panel, which is investigating the near collapse of the financial system and the heads of several big banks testified before Congress about the financial crisis. The Dow Jones Industrial Average closed higher by 53.66 points, or 0.50%, to 10,680.92. The broader Standard & Poor's 500 index added 9.97 points, or 0.83%, to 1,145.69 while the Nasdaq composite index rose by 25.59 points, or 1.12%, to 2,307.90.

Crude prices closed lower for the third consecutive day on Wednesday on the report of rise in petroleum supplies last week. Data from the Energy Information Administration, a unit of the Department of Energy showed that the nation's oil supply swelled by 3.7 million barrels last week, well above the average for this time of year. Gasoline supplies grew by 3.8 million barrels. Benchmark crude for February delivery declined by $1.14 to settle at $79.65 a barrel on the New York Mercantile Exchange. Crude fell as low as $78.37 earlier in the day. In London, Brent crude for February delivery fell 99 cents to settle at $78.31 a barrel on the ICE Futures exchange.

The Indian rupee traded in a tight range on Wednesday, the monetary tightening by the Chinese central bank raised speculation that similar decision might be taken at home by RBI. China on Tuesday raised the reserve requirement ratio, the proportion of deposits that banks must hold in reserve, by 0.5 percentage point, effective from January 18.On the same time most of the Asian currencies traded weak against dollar. Finally the rupee closed at 45.62, 10 paise higher compared to its Tuesday's close of 45.72.

The FII on Wednesday were the net sellers in the equity segment with gross buying of Rs 2893.60 crore against gross sell of Rs 3155.60 crore, while in the debt segment they were the net buyers with a gross purchase of Rs 945.10 crore against gross sales of Rs 817.80 crore.

The US markets closed higher on Wednesday helped by the rise in financial and technology stocks though the mood of investors still remain cautious and the slew of major corporate results is eyed before taking any decision. The Asian markets have bounced back after a severe decline in previous trading and most of the indices are trading with good gains. The domestic markets bucked the trend in last hours of previous trading and managed a close of green when all its Asian peers lost heavily. The mood of the market is likely to remain firm today, though the traders will be keenly watching the monthly inflation data to be released today.

Support and Resistance: S&P CNX Nifty and BSE Sensex

                                                          Nifty Top volumes

• Unitech expects its share of sales from redeveloping Mumbai slums into luxury apartments to triple in three years and boost profit. 
• Suzlon Energy's local subsidiaries in the US and Australian/New Zealand markets will support REpower as sales agents.
• Tata Metaliks, a subsidiary of Tata Steel is planning to set up a 3 million tonne per annum integrated steel plant in Karnataka.
• DDA has turned down a request by DLF to refund Rs 900 crore it paid when it was awarded the bid for the Dwarka Convention Centre, near IGI Airport, in 2007.
• Cairn India will commission the $1 billion pipeline for transporting crude oil from its Barmer block in Rajasthan to coastal Gujarat in the current quarter.