Markets flat in lackluster trade

After yesterday's bounce back on low volumes, markets could not make up their mind on the direction today. After opening firm in the morning on positive news of declining oil prices and firm US markets, the indices slipped early in the afternoon. Though the markets managed a small rally towards close, volumes continue to be low. Sensex closed at 6468, up 3 points and the Nifty at 2025, up half a point.

Among index stocks Gujarat Ambuja, Dabur and Glaxo were the biggest percentage gainers while Hero Honda, SAIL and Tata Steel were the major losers.

After trading weak till noon, US markets staged a smart come back later in the day to close with gains yesterday. The rally was triggered by an indication from the US Federal Reserve that future interest rate hikes would be measured. Investors are reading it as a continuation of the current policy of increasing interest rates in small measures and that there is no need to speed up the rate hikes. Concerns about widening US trade deficit were brushed aside. Dow and NASDAQ both gained over half a per cent each.

After trading firm in early trades, crude oil futures crashed below $52 to a barrel in New York yesterday. Traders liquidated their positions after the International Energy Agency (IEA) said it expects demand growth to weaken in the current year. It also said that demand for fuel during the month of February was surprisingly low. An indication from OPEC about increasing crude output further dampened the sentiment.

Indian ADR's had a mixed day yesterday. The IT companies staged a come back with Infosys gaining close to three per cent while Satyam gained over two per cent. However, Wipro closed marginally lower. Bank stocks had a good day with ICICI Bank and HDFC Bank both closing with gains. Dr. Reddy's, MTNL and VSNL closed with marginal losses.

Insurance behemoth LIC would invest Rs120,000 crore in debt and equities in the current year. Major part of this amount would go into government securities. LIC says its equity investments would increase by 20 per cent to over Rs10,000 crore.