Market may open flat to slightly higher

Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 5 points at the opening bell.

The government said on Tuesday that to protect the interests of small artisans, the customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof is being increased from 10% to 15%. A notification notifying the revised rates of customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof has been issued on Tuesday. As part of measures to contain the current account deficit, the customs duty on gold has been revised upwards periodically in the past two years. The government said jewellery making is a labour intensive industry. Millions of artisans are dependent on this sector for their livelihood. In the absence of any duty differential between articles of jewellery and primary metal, which was 8% in the case of gold jewellery and 4% in the case of silver jewellery in January 2012, there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India.

Meanwhile, the Reserve Bank of India (RBI) reportedly cracked down on offshore foreign exchange trading by Indians through online trading websites, asking banks to report any such remittances to the regulator. In a circular issued late on Tuesday, the Reserve Bank of India (RBI) asked banks to advise customers not to undertake forex trading on foreign websites that offer currency contracts by accepting margins through credit card and online money transfer mechanisms. The RBI also asked banks to close the credit card or online bank account of a customer that is found to be in violation of the rule.

At its upcoming mid-quarter monetary policy review on Friday, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures.

Key benchmark indices eked out small gains on Tuesday, 17 September 2013 as index heavyweight and cigarette major ITC extended intraday gains in late trade and as another index heavyweight Infosys rose. The S&P BSE Sensex rose 61.56 points or 0.31% to settle at 19,804.03 on that day, its highest closing level since 11 September 2013.

Foreign institutional investors (FIIs) bought shares worth a net Rs 318.05 crore on Tuesday, 17 September 2013, as per provisional data from the stock exchanges.

Asian stocks were mixed on Wednesday amid prospects the Federal Reserve will announce today whether it intends to pare back economic stimulus. Key benchmark indices in China, Japan, and South Korea rose by 0.04% to 1.77%. Key benchmark indices in Taiwan, Hong Kong, and Indonesia shed by 0.19% to 0.94%. South Korea's stock markets were closed for a holiday.

US stocks rose slightly on Tuesday on expectations the Federal Reserve will make a modest cut in its stimulative bond buying and keep interest rates extraordinarily low. A report in the U.S. on Tuesday showed the cost of living rose less than forecast in August, with the consumer-price index increasing 0.1%, the least in three months, Labor Department figures showed.

Investors across the globe are eyeing the two-day policy meeting of the Federal Open Market Committee (FOMC), considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC's two-day policy meeting on interest rates in the United States ends today, 18 September 2013. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years. Investors are also eyeing Fed's forward guidance on policy.