The Nifty and the Sensex closed flat on Thursday with market-men expecting the US Fed to announce the QE3.

The Nifty closed at 5435 up four points and the Sensex closed at 18021, up 21 points.

Dealers said inflation was not expected to come down drastically in the near future.

“The expectations are building up that US Fed will once again announce a monetary easing program. Such a measure would add liquidity to the system and eventually boost equities, as an asset class. And in that expectation there is already some run-up seen in the last few days. On the flip side, a non-event outcome would result in profit booking.

Any outcome that is favorable for developed nations, almost means improvement in business conditions of Indian IT companies as they derive bulk of revenues from there,” said Nagji K Rita, CMD Inventure Growth & Securities.

Inflation for the month of July was 6.87 per cent down from 7.25 in June.

Pharma indices were the largest losers of the day on the NSE and the BSE. All other indices closed flat.

Volatility was up four per cent and the India Vix closed at 15.67.

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