The market, however, does not expect any change in US interest rates. There are still concerns about slow growth in the West, and expectations are that by the second half of 2014 tapering will slowdown and easing would continue for some more time than predicted.
Any adverse news on Wednesday could lead to a cascading effect across the globe, including the Indian market. The Fed announcement would also help us understand what stance the Reserve Bank of India (RBI) is likely to take on April 1, when it announces its own monetary policy.
Back home, advance tax payment numbers will remain in focus. The Central Board of Direct Taxes has extended the date for payment of advance tax to March 18, from March 15, 2014. Advance tax payment is likely to offer a clue to the likely March 2014 corporate performance.
Meanwhile, as expected, the BSE Sensex last week took a pause after a sharp rise in the past few weeks. On Monday, March 10, 2014, the Sensex for the first time crossed the 22,000 mark, reaching an all-time high of 22,023.98. Thereafter, for the entire week, it traded weak on profit-booking, losing over 2 per cent from its all-time high to touch a low of 21,573.48 on Friday, March 14.
However, buying in the last hour or so of trading on Friday helped it regain some lost ground to close at 21,809.80, down half a per cent from its previous week's close of 21,919.79 on March 7.
Until the outcome of the general election is known, the Indian market is likely to remain volatile, reacting mainly on global cues, currency and FII flows.
With the Sensex hovering around 22,000, investors should stay guarded on their optimism and keep room for safety. Rather than trading, it will make more sense for them to invest and stick to large blue-chip stocks.