Sensex closes lacklustre trade flat; FOMC meet eyed

The BSE Sensex and NSE Nifty closed marginally higher amid consolidation on Wednesday, supported somewhat by positive Asian cues. But the broader markets outperformed benchmarks throughout the session.

Indian equities stayed higher for the second consecutive session after a disappointment by the RBI in first session of this week. The BSE benchmark rose 36.83 points, to close at 16,896.63. The NSE benchmark gained 16.70 points at 5,120.55 after trading in a range of 5100-5140.

Globally every market is keenly waiting for the outcome from Federal Open Market Committee's meeting that will be announced around 23 hours IST today. Market experts feel the base case scenario appears to be an extension of operation Twist.

"We expect the Fed to ease monetary policy on June 20, in response to the weak economic data and increased downside risks from Europe. However, the form of easing is a closer call. We expect a new asset purchase program, but an extension of Operation Twist is also possible," Jan Hatzius of Goldman Sachs said.

Among Asian markets, Shanghai, Nikkei, Straits Times, Kospi and Taiwan Weighted gained 0.5-1% whereas Shanghai fell 0.34% at close. France's CAC, Germany's DAX and Britain's FTSE were lacklustre in trade.

Back home, country's largest commercial vehicle manufacturer Tata Motors shot up 3% and top two-wheeler major Hero Motocorp was up over 1% whereas Maruti Suzuki fell over 1%.

Among metals and mining stocks, shares of Jindal Steel, Sterlite Industries and Tata Steel gained 1.5-3% while Coal India tanked 1.5%.

State-owned oil & gas producer ONGC rose 2% and drug maker Dr Reddy's Labs surged 3%.

Country's largest lenders ICICI Bank and State Bank of India went up 0.8% and 0.65%, respectively whereas HDFC Bank lost 0.5%.

Engineering and construction major by sales Larsen & Toubro moved up 0.9% and state-owned capital goods company BHEL was up 1.7% ahead of PMO meet on power equipment duty.

However, shares of cigarette major ITC and top telecom operator Bharti Airtel declined over 1%. Software services exporter TCS tanked 1.7% while its rival Infosys was down 0.3%.

The BSE Midcap and Smallcap indices gained 0.8% each as advancing shares outnumbered declining by 1613 to 1091 on the BSE.

In the second line shares, Educomp Solutions surged 11% as it has tied up for USD 155 million to pay off FCCBs worth USD 78.5 million on due date.

Aviation stocks like Kingfisher, Jet Airways and SpiceJet rallied 4-6% on reports that the civil aviation ministry will meet with finance ministry counterparts to discuss lowering aviation turbine fuel taxes.

Pantaloon Retail gained over 3% after Rakesh Biyani, joint managing director of Pantaloon says the company is planning some more transactions on non-core assets to further bring down debt.