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Sensex drops its gains, nearly flat 21,837

The BSE Sensex and the NSE Nifty shed most of their morning gains in the afternoon session on Tuesday. At 2.49 p.m. the Sensex was at 21,837.02, up 0.12 per cent or 27.22 points on its previous close. The Nifty was at 6514.15, up 0.15 per cent or 9.95 points on Friday’s close.The Maruti share held firm even as the sectoral index slipped into the red by late session. The share was up 7.59 per cent in afternoon trading on the BSE. SBI, ONGC, Coal India, ITC and Reliance Industries were the other stocks in the lead, holding gains of up to 3 per cent. Tata Motors, HDFC, L&T, M&M, Hindalco, Wipro, Infy and Sun Pharma were the prominent losers in the session.The BSE sectoral indices came off their early highs. The top gainers in the afternoon session were power (up 1.25 per cent), banking (0.53 per cent), oil and gas (1.41 per cent), metals (0.87 per cent) and FMCG (1.54 per cent).
According to an Equentis Market Outlook report, the financial year closure on March 31 and a pre-election rally are expected to rule market outlook. “Slowing inflation and a positive IIP has increased the probability of a rate cut from RBI in the near term. RBI’s rate cut could lead the market and banking sector into a fresh buying zone,” the report added.Volatility was up 3.46 per cent and the Volatility Index India Vix was quoting at 17.Asian shares rebounded as Japanese stocks gained on a weak yen and data from the US that indicated industrial production growth in February was the highest in six months.Japan’s Nikkei, Hong Kong’s Hang Seng index, Australia’s ASX 200 were trading firm in late session, while the Shanghai index had slipped into negative territory in the session.The market has its eyes on the Federal Reserve, which is to discuss monetary policy at a two-day meeting beginning today.The US Fed has indicated that it is likely to reduce the pace of bond purchase again, impacting global markets, including India. The US Fed has started reducing the pace of its stimulus by $10 billion every month.”Global/emerging markets and investors fear that after a US Fed rollback global investors may reallocate investments to US dollar and equities. Bond-buying becomes important in the backdrop that the Fed’s bond-buying programme has been a source of liquidity for most Asian and emerging markets this year,” the Equentis report said.

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