Volatility led the key Indian equity benchmarks to end the Wednesday's trading session flat with minor gains.  The key indices made a positive start of day, as India's exports grew by a 0.34 percent to $27.93 billion in December, continuing growth momentum for the third straight month. The trade deficit narrowed to ten-month low of $13.08 billion in December 2018 as against $14.20 billion in the same month previous year. The overall trade deficit for April- December 2018-19 is estimated at $82.72 billion as compared to $69.63 billion during April- December 2017-18. Traders were optimistic with the Reserve Bank of India's (RBI) statement that it will inject Rs 10,000 crore into the system through purchase of government securities on January 17 to increase liquidity. The purchase will be made through open market operations (OMOs). The RBI plans to inject liquidity under OMOs for Rs 50,000 crore in January 2019. The central bank has so far injected Rs 20,000 through OMOs in January. Meanwhile, the government has unveiled its much-awaited national air cargo policy, with an aim to make India among the top five air freight markets by 2025 and creating air transport shipment hubs at all major airports over the next six years. Trade remained positive for the most part of the session, tracking firm Asian markets. The market participants were seen taking support with private report stating that benign headline inflation to provide a dovish tilt to monetary policy committee (MPC). Softer December CPI and WPI prints of 2.2 per cent and 3.8 per cent, respectively reaffirm its belief that the MPC will adopt a more dovish tone in the February meeting and change its stance to neutral from calibrated tightening. The street also got some relief after the Fertiliser Ministry sought an additional Rs 23,000 crore from the Finance counterpart, in order to meet the subsidy requirement for the Q4 (January-March) of 2018-19. The fertiliser subsidy arrear touched about Rs 23,283 crore till December 2018, and some of it would be cleared with available funds and the remaining on receipt of additional funds. However, last leg volatility pulled markets near neutral lines to end flat. Sentiments also got hit, with ICRA's latest report indicating that a recent policy change favouring advanced degree holders for visas in US will lead to a hit on IT companies' profitability as the number of H1-B visas approved gets reduced. Finally, the BSE Sensex gained 2.96 points or 0.01% to 36,321.29, while the CNX Nifty was up by 3.50 points or 0.03% to 10,890.30.

Extending their gains for second straight day, the US markets ended higher on Wednesday, on the back of upbeat earnings report from financial institutions such as Bank of America (BAC) and Goldman Sachs (GS).  Shares of Bank of America reported fourth quarter results that beat Street estimates on both the top and bottom lines. Meanwhile, the Federal Reserve also released its Beige Book this afternoon, with the report saying economic activity has continued to increase in most of the US but also hinting at deterioration in optimism. The Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts, said eight of the twelve districts reported modest to moderate growth. Looking ahead, the Beige Book said outlooks generally remained positive, although many districts reported that contacts had become less optimistic. On the economic front, the Labor Department released a report showing another steep drop in import prices in the month of December, reflecting a continued nosedive in fuel prices. The Labor Department said import prices tumbled by 1.0 percent in December after plunging by a revised 1.9 percent in November. The report said export prices also fell by 0.6 percent in December after sliding by a revised 0.8 percent in November. However, a separate report from the National Association of Home Builders showed an unexpected improvement in homebuilder confidence in January. The report said the NAHB/Wells Fargo Housing Market Index rose to 58 in January after slumping to 56 in December. Dow Jones Industrial Average rose 141.57 points or 0.59 percent to 24207.16, Nasdaq added 10.86 points or 0.15 percent to 7034.69 and S&P 500 was up by 5.80 points or 0.22 to 2616.10.

Crude oil futures ended higher on Wednesday as a US government report revealed a second straight weekly decline in US crude supplies. The Energy Information Administration (EIA) said domestic crude supplies declined by 2.7 million barrels for the week ended January 11. The EIA reported a bigger-than-expected fall in crude inventories, but that decline also came amid an upward adjustment to the domestic production number-now to the mighty heights of 11.9 million barrels per day. Benchmark crude oil futures for February rose 20 cents or 0.4 percent to settle $52.31 a barrel on the New York Mercantile Exchange. March Brent crude gained 68 cents or 1.1 percent to settle at $61.32 a barrel on London's Intercontinental Exchange.

Continuing its weakening trend for the fourth straight session, Indian rupee depreciated against dollar on Wednesday, on increased demand for the US currency from importers. Traders remained concerned as exports grew at 0.34 per cent in December, marking the slowest pace in three months. The dollar's gain against other currencies overseas also weighed negatively on the market. However, further losses got restricted as some support came with report that declining imports narrowed the trade deficit to ten-month low of $13.08 billion in December 2018 as against $14.2 billion in the same month previous year. On the global front, euro slipped against dollar and pound on Wednesday as worries about the outlook of the euro zone economy weighed on the single currency while sterling edged higher before a no-confidence vote on Prime Minister Theresa May's government. Finally, the rupee ended at 71.24, 19 paise weaker from its previous close of 71.05 on Tuesday.

The FIIs as per Wednesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4283.63 crore against gross selling of Rs 3924.44 crore, while in the debt segment, the gross purchase was of Rs 1857.30 crore with gross sales of Rs 2549.25 crore. Besides, in the hybrid segment, there was no buying and selling.

The US markets ended higher for a second consecutive session on Wednesday, lifted by bank stocks as investors parsed the latest batch of corporate earnings. Asian markets were trading mostly in green on Thursday as upbeat bank earnings bolstered Wall Street, while an anticlimactic end to the latest chapter in the Brexit saga gave sterling a moment's peace. Indian markets ended flat with positive bias on Wednesday tracking mixed cues from the global markets amid geopolitical uncertainty. Today, the start is likely to be in green following positive cues from global markets. Traders will be getting encouragement as a working group of the Commerce and Industry Ministry came out with a blueprint suggesting a host of long and short-term measures to increase the size of India's economy to $5 trillion by 2025. It added that India's potential to achieve a $5 trillion GDP by 2024-25 is within the realm of possibility. Some support may also come with report that in a bid to improve the ease of doing business, the Reserve Bank of India (RBI) announced a new framework for external commercial borrowings (ECB) and rupee denominated bonds. Indian borrowers can now raise funds from offshore markets for at least three years without any ceiling on the amount. Traders may take note of a private report that with softer retail and wholesale price-based inflation, RBI is likely to change its policy stance to neutral from calibrated tightening in the February policy. Meanwhile, markets regulator SEBI has decided to allow mutual funds to write call options subject to certain conditions. Generally, call options refer to an agreement that gives a buyer the right to purchase an asset at a specified price within a particular time period. Besides, facing sustained pressure from start-ups and venture capital funds over the so-called angel tax, the government has relaxed norms for seeking exemptions from the controversial levy. The government scrapped the existing mechanism to approve start-ups applying for tax breaks under Section 56(2)(viib) of the Income Tax Act. There will be some buzz in the banking sector stocks with report that the government approved a capital infusion of Rs 6,000 crore in state-owned Exim Bank to expand its business. The equity will be infused in two tranches of Rs 4,500 crore in 2018-19 and Rs 1,500 crore in 2019-20 respectively. Traders will be eyeing some important earnings announcement including that of Reliance Industries and Hindustan Unilever.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Automobili Pininfarina GmbH, a wholly owned subsidiary of MAML which in turn is a wholly owned subsidiary of M&M has acquired 100% of the membership interests in Harkey Acquisition, LLC, USA. 
• RIL's telecom arm - Jio's 4G download speed has been decreased by about 8% in December to 18.7 mbps but the company continued to lead the chart published by telecom regulator Trai. 
• ZEEL has further strengthened its position as the number 1 television entertainment network with an all India viewership share of 20.2% in Q3FY19. 
• Maruti Suzuki India has launched NEXA Music.