Indian stock markets prolonging the lull for second straight day finished the session on a dull note, marginally above the neutral line as investors at large remained reluctant to build on long positions ahead of the expiry of January derivative contracts tomorrow and the US Federal Reserve meet outcome later today. Sentiments got some support  with Standard & Poor's Rating Services' statement that Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly. Some support also came with the report that business sentiment among Indian companies rose for the first time in three months in January, largely supported by the first increase in new orders since last June. MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE-listed companies, rose from 60.7 in December to 61.8 in January -- the highest since October 2015, as domestic orders strengthened. However, gains remained capped with the report that manufacturing activity in the country dipped to a one-year low in January, suggesting moderation in growth.  The yearly SBI Composite Index fell below the 50 mark to 47.3 in January -- its lowest level in the past one year. Market participants also remained cautious with the buzz that the government has to make some big bang announcements in the forthcoming Budget to resurrect investment in the public projects, or else the Indian economy can soon catch up the Chinese flu with serious consequences. On the global front, Asian markets barring China, closed higher, however, European equity markets suffered losses in early deals. Back home, after getting good start, Indian benchmarks slipped into negative territory on account of selling in frontline stocks and absence of positive triggers ahead of the expiry of January derivatives contracts on Thursday. Thereafter, the frontline indices traded near neutral line, altering between positive and negative territory, though some buying was witnessed in noon trade, but by the end of session the gains vaporized. Finally, the BSE Sensex gained 6.44 points or 0.03% to 24492.39, while the CNX Nifty ended up by 1.60 points or 0.02% to 7,437.75.

The US markets closed lower on Wednesday, after the Federal Reserve left the door open to a March rate increase despite acknowledging that economic growth slowed since its last meeting in December.  The Federal Open Market Committee left interest rates unchanged at its January 2016 meeting. The Fed stated in cautious tone that inflation is expected to remain low in the near term, that some saw as a suggestion the central bank won't be quick to raise interest rates again. On the economy front, sales of new homes rebounded handily in December, a signal of continued strength in the housing market. Sales ran at an annual pace of 544,000, the highest since February. That represented a 10.8% increase over a slightly upwardly revised November pace of 491,000. The Dow Jones Industrial Average lost 222.77 points or 1.38 percent to 15,944.46, the Nasdaq was down 99.50 points or 2.18 percent to 4,468.17 while the S&P 500 dropped 20.68 points or 1.09 percent to 1,882.95. 

Crude oil futures surged on Wednesday, paring early losses as buyers continued to find value among beaten-down energy products and a considerable inventory stockpile did not surge as high as some investors feared. The US Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that US commercial crude oil inventories for the week ending on January 22, increased by 8.4 million barrels from the previous week. Benchmark crude oil futures for March delivery surged by $0.86 or 2.72 percent to $32.30 a barrel after trading in a range of $30.14 and $32.58 a barrel on the New York Mercantile Exchange. In London, Brent crude for March delivery closed at $33.92, up $1.36 or 4.22 percent on the ICE.

Indian rupee extending its weakness for the second straight day depreciated against dollar on Wednesday ahead of the outcome of US Federal Reserve's two-day policy meet later in the day. Besides, month end demand for the greenback from banks and importers despite dollar remaining weak against other currencies overseas dented rupee sentiment. The sentiments were under pressure with the SBI Composite Index falling below the 50 mark to 47.3 in January. Manufacturing activity in the country dipped to a one-year low, suggesting moderation in growth. Further equity market which managed to end in positive despite having volatility failed to buttress the rupee. On the global front, dollar was slightly lower against the yen on Wednesday, as investors turned cautious ahead of potentially market-moving news from monetary policy meetings in the U.S. and Japan later this week. Finally, the rupee ended at 68.05, 22 paise weaker from its previous close of 67.83 on Monday.

The FIIs as per Wednesday's data were net buyers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3260.92 crore against gross selling of Rs 3138.50 crore, while in the debt segment, the gross purchase was of Rs 475.90 crore with gross sales of Rs 337.08 crore.     

The US markets ended lower in last session, weighed down by Federal Reserve's monetary policy announcement, as it talked about gradual rate increases but did not completely rule out a rate hike at its next meeting in March. The Asian markets have made mostly a positive start, overlooking weak US market leads. Japanese market has recovered from the early decline ahead of the Bank of Japan's meeting starting today. The Indian markets after a volatile trade managed a flat close with positive bias in last session. Today, the expiry session of the January F&O series is likely to be cautious and volatile movement can be witnessed throughout the day, as the traders will be settling their positions and rolling over to next series. Though, the trade may remain somber in early deals on some disappointing earnings number from some bluechip companies, but tailing the positive regional cues the mood may recover in latter trade. The infrastructure companies will remain in limelight, as the government has approved the hybrid annuity model for building national highways, paving the way for construction of 28 projects worth Rs. 36,000 crore this fiscal year. Also, the names of first 20 cities to be developed as Smart Cities will be announced by the government today. The telecom stocks too will be in action, as the Trai has recommended a mega auction of mobile airwaves - the biggest-ever so far- to tackle deficient consumer services and unlock revenues from the scarce national resource. A record windfall of nearly Rs 5.5 lakh crore could flow into the coffers of the government with the mega auction of mobile airwaves. The oil stocks too will be buzzing, as the World Bank has slashed its forecast for crude oil prices for 2016 but said India's growth story remains strong and robust.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• HCL Technologies has entered into a new IT Infrastructure partnership with Alstom, a world leader in the supply of most complete range of systems, equipment & services in railway sector.
• Bajaj Auto is set to launch 'V', a new motorcycle brand that contains metal from India's first aircraft carrier INS Vikrant, on February 1, 2016.
• Idea Cellular, one of the biggest cellular carrier of the country, is planning to launch 4G LTE network in 750 towns under 10 circles by June 2016.
• Housing finance company HDFC reported 6.6% increase in net at Rs 1,520 crore for the quarter ended December, 2015, as compared to Rs 1,426 crore in the same period a year ago.
• Power Grid has reported 31.26% rise in its net profit at Rs 1613.12 crore for the quarter ended December 31, 2015 as compared to Rs 1228.91 crore for the same quarter in the previous year.