Post Session- Sensex closes flat as Fed policy action eyed Analysis for Jun 20, 2012

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With all eyes on the US Federal Reserve"s policy decision on Wednesday, most market participants stayed on the sidelines as the Sensex closed on a flat note, with a positive bias today.

Most Asian markets closed higher today as investors waited with bated breath over the Fed policy decision. Speculation is rife that the Federal Reserve may announce further measures to spur growth in the world"s largest economy. Slowing job growth and deepening global headwinds are threatening to derail US economic recovery, adding the case for additional monetary stimulus. The Fed may extend its Operation Twist program which involves selling short-term debt and buying longer-term debt to lower long-term interest rates. A more drastic measure could see another round of quantitative easing or an outright purchase of bonds by the Fed to inject liquidity into the banking system.

On the domestic front, the Sensex closed higher for a second straight day after shedding 1.5 per cent on Monday, when the RBI failed to deliver a rate cut to ease growth concerns. After witnessing a gap up opening, the domestic benchmarks traded on a lackluster note throughout the day as traders awaited news on the US monetary policy.

The BSE SENSEX closed at 16,896.63, up by 36.83 points or by 0.22 per cent and the NSE Nifty ended at 5,120.55, up by 16.7 points or by 0.33 per cent.

The BSE Sensex touched intraday high of 16,962.49 and intraday low of 16,840.1 The NSE Nifty touched intraday high of 5,141.7 and intraday low of 5,100.7.

Meanwhile, the BSE MIDCAP closed at 5,954.37, up by 48.89 points or by 0.83 per cent, while the BSE SMLCAP ended at 6,356.49, up by 49.94 points or by 0.79 per cent.

On the Sectoral front, Metal and Capital Goods gained 1.28 per cent and 1.17 per cent, respectively.

Out of the 30 Sensex stocks, there were 18 advances and 12 declines. The Market breadth, indicating the health strength of the market, was strong. On BSE out of total shares traded 3489, shares advanced were 1642 while 1137 shares declined and 710 were unchanged.

The top gainers of the BSE Sensex pack were Sterlite Industries (India) Ltd. (Rs. 97.25,+3.07%), Dr. Reddy's Laboratories Ltd. (Rs. 1589.50,+2.96%), Tata Motors Ltd. (Rs. 245.05,+2.83%), Jindal Steel & Power Ltd. (Rs. 439.00,+2.62%), Oil And Natural Gas Corporation Ltd. (Rs. 272.70,+1.91%), among others.

Among the Asian markets, Shanghai Composite ended down 0.34 per cent, Hang Seng closed up 0.53 per cent and Nikkei 225 ended higher by 1.11 per cent.

Among the European stock markets, CAC 40 was down 0.18 per cent, DAX was up 0.12 per cent and FTSE 100 was trading higher by 0.38 per cent at 16:42 PM IST.

Story first published: Wednesday, June 20, 2012, 18:20 [IST]
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