Market seen range-bound in volatile trade

Key benchmark indices are likely to trade in a narrow range on mixed global cues with stock specific activity ruling the roost. Volatility may rise ahead of the outcome of the two-day Federal Reserve meeting, which concludes today. The US central bank has already cut interest rates to nearly zero and is searching for other tools to pull the world's largest economy out of a deepening year long recession.

The Fed could unveil fresh steps to ease the global credit crunch when it concludes a two-day policy meeting later in the day, and traders will be scouring its statement for any clues on whether it will buy US government bonds, which could help check longer term borrowing rates.

On Tuesday, 27 January 2009, the Fed took a step toward easing mortgage foreclosures threatening millions of Americans, announcing that it would write down troubled mortgages to keep people in their homes.

Volatility may also rise as futures & options contracts for January 2009 series expire on Thursday, 29 January 2009. As per reports, rollover of Nifty positions from January 2009 series to February 2009 series was 47% while marketwide rollover of positions stood at 44%, as on Tuesday, 27 January 2009.

ONGC, HPCL, Gail India, NMDC, among others will declare their December 2008 quarterly results today, 28 January 2009. The street was already anticipating poor Q3 December 2008 earnings from Indian Inc on high input costs, the credit crunch and high interest rates, coupled with the burden of piled-up inventories. Aggregate results of 830 companies showed 23% fall in net profit on 17.40% increase in net sales in Q3 December 2008 over Q3 December 2007.

Foreign brokerage Morgan Stanley in its research report dated 5 January 2009 said earnings of 30 BSE Sensex firms are set for their first quarterly drop in Q3 December 2008, since the data was first made available in 1999. It estimates the BSE Sensex earnings to drop 0.2% year-on-year basis compared with a growth of 5.5% and 20% in the September 2008 and June 2008 quarters, respectively.

Foreign institutional investors (FIIs) are in selling mode after an inflow of Rs 1319.10 crore in December 2008. Their outflow in January 2009 totaled Rs 4,294.30 crore (till 23 January 2009).

According to provisional data on NSE, FIIs were net sellers worth Rs 228.56 crore while mutual funds bought shares worth Rs 139.64 crore on Tuesday, 27 January 2009.

Asian stocks open mixed today, 28 January 2009 helped by gains on Wall Street, but Japan lagged as exporters such as Honda Motor Co lost ground on news that US consumer confidence has slumped to record lows.

Japanese benchmark index Nikkei fell 56.10 points, or 0.70%, to trade at 8,004.97. However South Korea`s Kospi index gained 47.51 points, or 4.35%, to trade at 1,140.91 and Singapore`s Straits Times advanced 40.12 points, or 2.38%, to trade at 1,725.35.

Hong Kong, China and Taiwan`s stocks are not trading today. The markets will remain closed from Monday to Wednesday for the Lunar New Year holidays and will reopen on Thursday, 29 January 2009.

US stocks ended higher on Tuesday, 27 January 2009, as better corporate earnings news helped offset depressing reports on consumer confidence and housing prices.

The Dow Jones industrial average increased 58.70 points, or 0.72%, to end at 8,174.73. The Standard & Poor`s 500 index climbed 9.14 points, or 1.09%, to settle at 845.71. The Nasdaq composite index increased 15.44 points, or 1.04%, to close at 1,504.90.

Oil rebounded above $42 a barrel today, 28 January 2009 from a 9% fall a day ago, as worries over demand due to the faltering global economy eased. U.S. crude rose 67 cents a barrel to $42.25