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As expected, the bulls managed to hold their own, thanks largely to optimism surrounding the latest round of fiscal stimulus. The market is hoping that the tax cuts will help provide cushion to the sluggish Indian economy against any further fallout from the global economic mess. A recovery may already be underway if one goes by the latest bank lending data. But, keep a close watch on upcoming macro numbers to gauge the pulse of the economy. In a world of I-T audits and fresh FDA moves against companies, probe deeper before taking a call.

Today's inflation figures and Friday's Q3 GDP report will be keenly followed. While inflation will moderate further the GDP for Oct-Dec quarter is likely to come in at around 6-6.5%. For the whole year, the government sees GDP growing at 7.1%. The Government is also slated to unveil an interim trade policy today. Exporters, especially those hit by the global downturn may get some additional sops.

Coming to today's market, we expect the key indices to open with a positive bias, but may run out of steam later. Considering today's F&O expiry, we do not rule out increased intra-day gyrations. US stocks closed lower overnight while their counterparts in Europe advanced. Asian markets are mixed this morning.

Ranbaxy may come under pressure on the latest regulatory action by USFDA. DLF will also hog the limelight amid news of a special audit of its accounts by the I-T Department. Satyam of course will remain in the spotlight as its board meets today to finalise the details of the proposed preferential allotment and the criteria for shortlisting potential bidders.

Piramal Healthcare is among the other stock to keep an eye on as a newspaper reports that French drugmaker Sanofi Aventis is the front-runner for buying the Mumbai-based pharma major. RPL is also under regulatory scanner for the oil-for-food scam.

FIIs were net sellers in the cash segment on Wednesday at Rs3.84bn, while the local institutions pumped in Rs3.67bn. In the F&O segment, the foreign funds were net buyers at Rs4.14bn. On Tuesday, FIIs were net sellers in the cash segment at Rs3.92bn. Mutual Funds poured in Rs240mn on the same day.

US stocks ended in the red on Wednesday, notwithstanding a late-session rally. Dividend cuts triggered a sell-off in insurers and an unexpected drop in home sales dragged down industrial shares, overshadowing speculation that banks will pass the government's so-called stress tests.

The Dow Jones Industrial Average lost 80 points, or 1.1%, to end at 7,270.89. The S&P 500 index fell 8 points, or 1.1%, to close at 764.90. The Nasdaq Composite index dropped 16 points, or 1.1%, to finish at 1,425.43.

Stocks tumbled in the morning after a report showed existing home sales plunged to an 11-year low in January. But they managed to cut losses and even turn higher in the afternoon after the bank plan announcement, with a number of financial stocks rallying.

After a brief rally, stocks erased the gains and turned lower again, as investors continued to worry about the depth and duration of the recession.

Treasury plans to test the 19 banks with more than $100 billion in assets to see if they have enough capital to hold up if unemployment rises to 10% and the housing market contracts another 20%. The testing will be over by the end of April.

Treasury's bailout plan is ideally meant to keep banks afloat, but also get them to lend again. The plan may achieve that, but it doesn't resolve the problem of how to value the bad assets at a price that is both good for the holders and good for the buyers.

Shares of bank stocks were volatile after the Treasury announcement.

Speaking on Tuesday night before both chambers of Congress, US President Barack Obama told the nation: "We will rebuild, we will recover and the United States of America will emerge stronger than before."

The president outlined plans for creating jobs, stabilizing the credit markets, reforming health care and improving schools, among other issues. Separately, President Obama told Congress on Wednesday that stronger financial sector regulation is needed.

Federal Reserve chairman Ben S. Bernanke told the House Financial Services Committee on Wednesday that fixing the mortgage market is necessary for fixing the financial market, even if it means bailout out irresponsible buyers.

In company news, Ford Motor's CEO and chairman agreed to cut their pay by 30% for the next two years and to suspend bonuses for salaried workers. Ford will also offer another round of buyouts and early retirement packages to all of its hourly workers. The changes were announced as union members are nearing a vote on contract concessions.

General Motors (GM) rallied nearly 15%. Currently, an Obama administration task force is reviewing turnaround plans from GM and Chrysler, which have asked for a combined $22 billion more in bailout money on top of the $17.4 billion they have already received.

GM issues fourth-quarter results before the start of trading on Thursday.

In deal news, Canadian fertilizer Agrium made a hostile bid for US rival CF Industries worth $3.6 billion in cash and stock - a 30% premium over CF's closing price on Tuesday. Any deal is conditional on CF giving up its hostile offer for Terra Industries, which the company has already rejected.

First Solar plunged 22% in unusually active Nasdaq trade after the solar panel maker warned late on Tuesday that first quarter and full-year 2009 revenue will fall from a year ago amid a bleak outlook for the industry and economy.

Treasury prices tumbled, raising the yield on the benchmark 10-year note to 2.92% from 2.79% on Tuesday. Treasury prices and yields move in opposite directions.

US light crude oil for April delivery rose $2.54 to settle at $42.50 a barrel on the New York Mercantile Exchange. The price of oil was volatile after the government said the supply of crude increased less than expected last week.

COMEX gold for April delivery fell $3.30 to settle at $966.20 an ounce.

In currency trading, the dollar gained versus the euro and the yen. On Thursday, investors will focus on Obama's fiscal 2010 budget plan, the weekly jobless claims and reports on new home sales and durable goods orders.

European shares pulled back from early gains to close lower again on Wednesday, as losses from drugmakers and utilities offset gains for banks. The pan-European Dow Jones Stoxx 600 index fell 0.3% to 172.31.

Germany's DAX 30 index slid 1.3% to 3,846.21 and the French CAC-40 index lost 0.4% to 2,696.92. The UK's FTSE 100 index gained 0.9% to 3,848.98.

Markets ended with modest gains on Wednesday led by the auto, IT, telecom and metal stocks. Overnight gains in the US and firm cues from the Asian markets lifted the Indian bourses at open. Key indices were in a constant uptrend until profit booking at higher levels dragged the benchmark index to close with modest gains.

Finally, the BSE Sensex advanced 80 points to close at 8,902 and the NSE Nifty was up 28 at 2,762.

Among the 30-components of Sensex, 23 stocks ended in positive terrain and 7 stocks ended in the red. Among the major gainers were, M&M, Tata Motors, Reliance Infra, Wipro, TCS and Infosys.

Among the major laggards were, HDFC, Ranbaxy, DLF, L&T and RCom.

Shares of M&M surged by over 8% 6to Rs318 after reports stated that the company's agri arm has entered into a strategic alliance with Dutch Co HZPC. The scrip touched an intra-day high of Rs320 and a low of Rs295 and recorded volumes of over 4,00,000 shares on BSE.

Shares of Suzlon Energy surged by over 2.5% to Rs41.3 after the company announced that, Suzlon Energy Australia Pty Ltd., a step-down wholly owned subsidiary of the company entered into an agreement with AGL Energy Ltd for supply of 54 units of Suzlon's S88-2.1 MW wind turbine generators translating to 113.4 MW capacity in Australia in 2009. The scrip touched an intra-day high of Rs42.6 and a low of Rs41 and recorded volumes of over 62,00,000 shares on BSE.

India's income tax department ordered an audit of accounts of DLF Ltd., India's biggest developer, as part of a probe of housing companies, a junior minister of finance said.

Shares of DLF slipped by 1.7% to Rs154 after the government said that it was examining a special audit report for the assessment year 2006-2007. Some housing companies have misstated income and profits, the minister said today. The scrip touched an intra-day high of Rs162 and a low of Rs153 and recorded volumes of over 72,00,000 shares on BSE.

Shares of Hindustan Dorr-Oliver were locked at 20% upper circuit to Rs31.8 after the company announced that it won order worth Rs4.41bn. The scrip touched an intra-day high of Rs31.8 and a low of Rs25.1 and recorded volumes of over 2,00,000 shares on BSE.

Shares of Sical Logistics ended flat at Rs23. The company announced its strategic partnership with MMTC Limited for its greenfield iron ore terminal project at Ennore Port.

MMTC would hold 26% stake in Sical Iron Ore Terminals Ltd (SIOT), the special purpose vehicle (SPV) building the 12 MTPA (mn tons per annum) iron ore terminal and Sical will hold 63% stake. The balance 11% will be held by L&T Infrastructure Development Projects Ltd. The scrip touched an intra-day high of Rs24.6 and a low of Rs23.6 and recorded volumes of over 2,000 shares on BSE.

Shares of Jet Airways slipped by 2.5% to Rs140. According to reports, the company would lease out four aircrafts to Gulf Air Company GSC Bahrain. The scrip touched an intra-day high of Rs151 and a low of Rs139 and recorded volumes of over 2,00,000 shares on BSE.