Domestic equity markets extended their losing streak to sixth consecutive session on Wednesday led by the bleak global cues. Besides this, futures & options (F&O) expiry jitters also added to market's woes. After opening marginally in the green, the NSE's 50-share Nifty witnessed sharp cuts in early trades as it tried to catch up its Asian peers, which suffered heavy sell-off in Tuesday's session. Selling pressure was so intense that even the crucial support levels were surrendered easily by the bulls. The S&P CNX Nifty finished below the psychological 4900-mark. In fact, this is the biggest single day fall for the Nifty since August last year. As the index violated the important support level of 4900, the stop-loss for most of the long positions got triggered, which put more pressure on the Nifty. The markets witnessed highest ever turnover of Rs 1.80 lakh crore in trade. Profit booking was evident across the board and severely affected realty, metal and auto counters. Rate sensitive banking counter also took beating from the bears ahead of the RBI's monetary policy review later this week. The picture was even worse for the broader indices, as second line stocks got sold-off in trade. Finally, the BSE Sensex tumbled 490.64 points or 2.92% to settle at 16,289.82 while the S&P CNX Nifty plunged 154.80 points or 3.09% to close at 4853.10. 

The US markets moved higher on assurance of Federal Reserve that the economy is improving and the interest rates will stay low. The indices made a weak start on Commerce Department report saying  sales of new homes fell 7.6% in December, but the Fed's statement that "economic activity has continued to strengthen" infused calm into a nervous market and the indices were able to recover from an early slide to end moderately higher. The Fed left interest rates near zero and said that it still expects to end a program to lower mortgage rates as expected on March 31. The Dow Jones industrial average added 41.87 points, or 0.41%, to 10,236.16. The Standard & Poor's 500 index rose by 5.33 points, or 0.49%, to 1,097.50, while the Nasdaq composite index closed higher by 17.68 points, or 0.80%percent, to 2,221.41.

Crude prices declined further on Wednesday as the dollar strengthened and on data showing higher refined product inventories. The dollar got a lift against euro after the US Federal Reserve issued a statement that it would continue to keep the interest rates low for an extended period. Benchmark crude oil for March delivery fell $1.04 to settle at $73.67 per barrel on the New York Mercantile Exchange. In London, March Brent crude ended down $1.05 or 1.43 percent, at $72.24 a barrel, trading from $71.28 to $73.62.

The Indian rupee declined to its three week low on Wednesday. The domestic currency started weak as the local stock markets were not looking in good health and when the selling intensified in the equity markets the rupee followed the suit and during its intraday trade touched its three week low of 45.42. Most Asian currencies were however stronger compared to the dollar but they were unable to support the fall. Finally the rupee closed at 46.37, 24 paise weaker compared to its Monday's close of 46.13.

The FII on Wednesday were the net sellers in the equity segment with gross buying of Rs 1628.70 crore against gross sell of Rs 2529.10 crore, while in the debt segment they were the net buyers with a gross purchase of Rs 1392.90 crore against gross sales of Rs 191.00 crore.

The US markets made some recovery with positive statement of Federal Reserve, assuring investors for a strengthening economy. Though, the gains were limited as the Commerce department reported that new home sales declined. The Asian markets are showing sign of recovery and most of the indices are trading in green though the Chinese markets is still in the somber mood and is marginally down. The domestic markets suffered a huge sell-off in last session and the Nifty witnessed its largest single session loss since August. Markets are likely to get a positive start on the supportive global cues but being the expiry day of F&O series the trade might turn choppy in the late hours.

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

                                                          Nifty Top volumes

• PVR has postponed its plans to buy the cinema exhibition business of DT Cinemas, a subsidiary of DLF, till February 15, 2010.
• JPVL, the power generation business of Jaiprakash Associates, has launched FCCB  issue of $200 million priced with an upsize option of up to $100 million.
• Hindustan Unilever has received the board's nod for merger of its subsidiary Bon, with the company.
• IDFC has reported a net profit rise of 39.05% to Rs 240.11 crore for the December 2009 quarter against Rs 172.68 crore for the December 2008 quarter.
• Hindalco Industries' net profit for the Q3 has declined by 21.60% to Rs 427.10 crore from Rs 544.80 crore in the corresponding previous quarter.