After a consolidation, equity benchmarks closed marginally higher on Wednesday as traders remained cautious ahead of expiry of July derivative contracts & the outcome of Federal Reserve’s two-day meeting. The Sensex rallied more than 200 points in morning trade on hopes of stimulus measures by Bank of Japan but turned volatile in afternoon trade, especially after correction in China’s Shanghai on fears of regulatory changes.The 30-share BSE Sensex was up 47.81 points at 28024.33 and the 50-share NSE Nifty gained 25.15 points at 8615.80 while the BSE Midcap and Smallcap indices outperformed benchmarks, rising around half a percent.

Experts says considering the current liquidity gush, the market may continue its uptrend after F&O expiry and Fed meet outcome, though earnings so far failed to lift sentiment and rollovers are lower.

The FED is likely to hold the rate, however the comments will have an influential impact on the liquidity standpoint and for any chance of an increase in the interest rate by December-2016, Vinod Nair of Geojit BNP Paribas Financial Services said.

The buying of Indian equity shares by FIIs have been more than Rs 8,500 crore in July so far against worth Rs 5,175 crore in June.

Dr Reddy’s Labs crashed 10 percent after dismal set of earnings in Q1 due to US pricing issue. Jefferies has downgraded the stock to underperform from hold with a reduced target price of Rs 2850 per share. It has also cut FY17-18 earnings estimates by 28-14 percent and expects earnings to remain flat over FY16-18.

HDFC gained 1.5 percent after better-than-expected increase in Q1 profit at 38 percent on the back of stake sale in insurance business, though asset quality rose marginally to 0.75 percent from 0.7 percent and net interest margin fell 20 basis points to 3.8 percent on sequential basis.

JSW Steel rallied nearly 5 percent after stellar performance in Q1. Profit increased more than 52-fold and EBITDA per tonne jumped over 70 percent while Yes Bank and Bajaj Auto closed flat post earnings.

Lupin gained 1.1 percent on tentative approval from the USFDA for Lexiva generic tablets from Goa plant. Bharti Airtel was up 0.87 percent ahead of earnings due later today.

ICICI Bank was the biggest gainer among Sensex 30 stocks, up 3 percent followed by Tata Motors, Maruti Suzuki, TCS and Adani Ports while ITC, Reliance Industries and Tata Steel declined 1-1.5 percent.

On the global front, Asia closed mixed with the benchmark Nikkei 225 rising 1.72 percent after Reuters reports suggested that Prime Minister Shinzo Abe will compile a stimulus package of more than USD 265 billion to prop up Japan’s flagging economy. European markets – France’s CAC, Germany’s DAX and Britain’s DAX – were up 0.5-1.5 percent at the time of writing this article.