Caution over chances of an interest rate hike in the US coupled with a weak rupee dented investors' sentiments in the Indian equity markets on Wednesday leading to a barometer index of the Indian equity markets provisionally closing the day's trade flat.
The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained only six points or 0.03 percent.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also ended trade on a flat note -- but on a negative note, in contrast. It inched down by 9.10 points or 0.12 percent to 7,427.05 points.
Initially, both the bellwether indices opened on a flat-to-positive note in sync with their Asian peers and firm closing of the domestic markets on Monday.
Moreover, short-coverings were supported by firm oil prices and expectations of healthy roll-over figures from the F&O (Futures and Options) expiry slated for Thursday.
However, caution over the upcoming rate-setting meeting of the US Fed capped gains. The US Fed's FOMC (Federal Open Market Committee) meet is scheduled for January 27-28.
Even, the weakness in rupee subdued sentiments. The rupee value weakened to 68-level against a US dollar during intra-day trade.
The weakness in the rupee value indicates the massive outflow of foreign funds from the Indian equity and debt markets.
On Monday, the last working day of the Indian equity markets, the foreign institutional investors (FIIs) were net sellers. According to data with stock exchanges, FIIs divested Rs.91.15 crore.
"Rupee got off to a weak start today on the back of large short positions from arbitrageurs in domestic market in the front month contracts on the exchange," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.
The S&P BSE Sensex, which opened on Wednesday at 24,643.13 points, provisionally closed at 24,492.39 points (at 3.30 p.m.) -- up 6.44 points or 0.03 percent from the previous day's close at 24,485.95 points.
The Sensex touched a high of 24,645.70 points and a low of 24,458.13 points during the intra-day trade.
In addition, the S&P BSE market breadth was flat, though it marginally favoured the bulls -- with 1,354 advances and only 1,201 declines.
