Indian stocks markets showed a volte-face on Thursday as what started on a promising note, ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory despite getting off to a gap-up opening. The sentiments were optimistic in early trade after the US Fed kept key rates unchanged and brought down the anticipated hikes in 2016 to two from its earlier December 2015 forecast of four. Emerging markets, including India, rejoiced as fears of massive exodus of foreign capital should abate with a more modest increase in the US rate trajectory expected over the medium-term. Gains were visible across Asian markets with the Shanghai Composite, Straits Times, Taiwan Weighted and the Hang Seng rallying between 0.5 percent - 1.5 percent. On the domestic front, sentiments also got some support from reports that foreign institutional investors (FIIs) pumped nearly $2 billion in Indian markets, as compared to a withdrawal of nearly $3 billion in the first two months of calendar year 2016. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee strengthened by 54 paise to 66.68 against the dollar at the time of equity markets closing on increased selling of the US currency by exporters & banks. However,  Investors squared off position in the dying hours of trade as sentiments turned pessimistic on concerns over Finance Minister Arun Jaitley's statement that it is ‘extremely difficult' to achieve double-digit growth in the current global environment, though there is a scope for improvement from the current rate if reforms are carried on. Apart from this on the global front, sentiments also petered out after European counters made a weak start. Back home, the optimism started showing signs of easing in late hours of trade and profit booking in few sectors and sharp selling in pharma stocks weighed down the local bourses. Finally, the BSE Sensex declined by 5.11 points or 0.02% to 24677.37, while the CNX Nifty rose 13.80 points or 0.18% to 7,512.55. 

The US markets closed higher on Thursday, with the Dow Jones Industrial Average rising for the fifth straight session to close in positive territory for 2016, for the first time this year. On the economy front, the number of Americans who applied for unemployment benefits in the second week of March rose by 7,000 to 265,000, but the rate of layoffs taking place in the economy are still exceedingly low. Initial claims have been below the 300,000 threshold for 54 weeks, the longest stretch since 1973. The low level of claims indicates a much healthier US labor market compared to several years ago. The average of new claims over the past four weeks, meanwhile, edged up by 750 to 268,000. Some 2.24 million people collected weekly unemployment benefits, known as continuing claims, in the seven days ended March 5. Meanwhile, a reading of manufacturing activity in the Philadelphia area unexpectedly turned positive in March, marking the first positive showing in seven months. The Philadelphia Fed manufacturing index rose to 12.4 from a negative 2.8 in February. The Dow Jones Industrial Average added 155.73 points or 0.90 percent to 17,481.49, the Nasdaq was up 11.02 points or 0.23 percent to 4,774.99 while, the S&P 500 gained 13.37 points or 0.66 percent to 2,040.59. 

Crude oil futures extended their rally and surged more than 4% on Thursday, as the dollar continued its weakness after the Federal Reserve came up with a dovish monetary policy decision a day ago. The rally was also supported by reports that OPEC and Non-OPEC producers will meet in mid-April in Doha in their latest effort to stabilize oil prices. Benchmark crude oil futures for April delivery surged by $1.70 or 4.42 percent to $40.19 a barrel after trading in a range of $38.48 and $40.25 a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery closed at $41.54, up $1.20 or 2.95 percent on the ICE.

Indian rupee appreciated for the second consecutive session against dollar on Thursday due to increased selling of American currency by exporters and banks. Sentiment remained optimistic with the US Federal Reserve who has scaled back its projection for interest-rate hikes, keeping its policy rate unchanged at the end of its two-day rate-setting meeting and has once again boosted the call of rate cut from the Reserve Bank of India. The domestic currency looked strong from the very beginning and was also supported by the gains in equity markets, which despite some choppiness managed to end flat. On the global front, dollar sank against other major currencies on Thursday, after a Federal Reserve meeting left markets convinced that U.S. interest rates would not rise anytime soon. Finally, the rupee ended at 66.68, 57 paise stronger from its previous close of 67.25 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3652.53 crore against gross selling of Rs 2956.64 crore, while in the debt segment, the gross purchase was of Rs 1717.71 crore with gross sales of Rs 970.65 crore.         

The US markets coming out of their early lackluster performance, turned higher in the last session, taking the major averages to their best closing levels in over two months. Traders reacted to a report from the Philly Fed showing an unexpected expansion in regional manufacturing activity in the month of March. The Asian markets outside Japan have made a good start, as crude oil prices firmed above $40 a barrel, though the Japanese market was down led by exporters as the yen headed for its best week in a month. The Indian markets lost their pace completely in the final moments and made a flat closing in last session. Today, the start of the local markets is likely to be firm tracking the gains in the global markets after crude oil prices surged to their three months high. Traders will also be taking some cues from the rupee movement, which rose to a two-month high against the US dollar in last session, after US Fed tempered expectations of further rate hikes. Meanwhile, the Reserve Bank of India has issued guidelines to trade in currency futures and said that primary dealers or bond houses should have a minimum capital base of Rs 250 crore to participate in the exchange traded currency futures market. There will be some buzz in the markets with the statistics ministry's plan to include ecommerce in the calculation of the consumer price index (CPI), as more Indians take to shopping online. There will be some concern too in the market related to the passing of the GST Bill in the parliament after Finance Minister Arun Jaitley said it's difficult to accept demand of the Congress to cap GST rate in the pending Constitution Amendment Bill, however he remained hopeful that it will get passed in the second half of the current Budget session.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Tata Motors has bagged order for supply of 25 Starbus diesel series hybrid electric buses from the Mumbai Metropolitan Region Development Authority.
• Tata Consultancy Services has launched a peer-to-peer mobile payment solution with DNB the largest financial services group in Norway.
• HDFC Bank has unveiled a banking solution service 'SmartUp' for startups to fulfill all their banking needs.
• Reliance Industries' subsidiary Reliance Jio Infocomm is planning to raise upto Rs 5,000 crore through debentures to fund business operations.
• Idea Cellular and Videocon Telecommunications have mutually agreed to terminate an earlier spectrum trading agreement worth Rs 3,310 crore with immediate effect.