RTTNews - Wednesday, the Indian market may show extreme volatility ahead of derivative contracts expiry on Thursday. The mood is likely to be cautious ahead of the U.S. Federal Open Market Committee meeting on Wednesday.

Amid mixed global cues and continuous selling foreign funds, support from domestic financial institutions may influence market movement. On Tuesday, while FIIs sold shares worth Rs.654.97 crore on a net basis, domestic funds made a net investment of Rs.318.42 crore. Currently, Asian stocks are trading mixed after a broad-based sell-off in the previous session.

On Tuesday, stocks ended little changed on Wall Street after a choppy ride. Volumes were thin as traders mostly stayed on the sidelines ahead of the release of the Federal Reserve's outlook on interest rates. While the Fed is expected to leave rates unchanged, traders will keep a close eye on the accompanying statement. A lower than expected rise in existing homes sales also weighed to an extent. While the S&P 500 index finished up 0.23%, the Dow Jones Industrial Average slipped 0.19% and the Nasdaq Composite index edged down 0.07%.

The Indian ADRs closed mixed. Sterlite and MTNL rose nearly 4% each, Reddy's Laboratories gained 2.23%, Infosys added 1.14% and Wipro advanced 0.56%, but ICICI Bank shed 0.67%, HDFC Bank fell 3.24% and Satyam Computers ended down 0.31%.

Crude oil futures for August delivery jumped in New York trading on Tuesday as investors looked ahead to the Energy Information Administration's weekly inventory report, which is expected to show a drop in stockpiles on Wednesday. Light sweet crude futures for August delivery settled at $69.24 per barrel, up $1.74 or 2.58% on the session after moving in a range of $66.37-$69.68. during the session.

Meanwhile, after falling over 2% in early trading on global economic worries, the Indian market recovered sharply to close almost flat on Tuesday, helped by support from domestic financial institutions and short covering ahead of June series derivatives settlement on Thursday. While the BSE Sensex finished mostly unchanged at 14,324, down 2 points or a modest 0.02%, the S&P CNX Nifty rose 12 points or 0.28% to 4,247 and the BSE mid-cap index gained 0.24%, but the BSE small-cap and the broad-based BSE 500 indexes showed modest losses. The market breadth on the BSE was negative, as decliners outnumbered advancers by 1455 to 1116, with 68 stocks closing unchanged.

In corporate news, ONGC could be in the spotlight ahead of its results announcement on Wednesday.

Great Offshore may rise further after Bharati Shipyard revised its open offer price for a 20% stake in the company to Rs.403 per share.

Bajaj Auto expects the current financial year to be the best in the company's history with regard to sales and profitability, reports suggest. Firstsource Solutions bagged a five-year outsourcing deal worth Rs 145 crore from Idea Cellular.

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