Indian equity benchmarks moved from strength to strength throughout the day and finally settled with gains of around a percent on Wednesday, a day ahead of Reserve Bank of India's monetary policy decision. The major indices maintained their upward trend for the fourth day in a row, with the Sensex rising by 582 points and the Nifty finishing 159 points higher. Key gauges opened higher as traders got encouragement after gross direct tax collection in 2022-23 rose by around 20 per cent to Rs 19.68 lakh crore, exceeding the government's revised collection target. Sentiments remained up-beat with Commerce and Industry Minister Piyush Goyal's statement that the country's goods exports touched $447 billion till the last count for 2022-23 fiscal year as against $422 billion in 2021-22. Some support also came with Credit rating agency Crisil's report stating that banks' gross non-performing assets (NPAs) will reduce further to a decadal low of 3.8 per cent by end of FY2023-24. The agency estimates NPAs to reduce to 4.2 per cent by end of the just concluded FY23 as against 5.9 per cent in the year-ago period. It had earlier estimated NPAs to come at 4 per cent by end of FY24. Markets extended gains in late afternoon deals as sentiments remained optimistic, amid a private report stating that the new Foreign Trade Policy (FTP) 2023, announced recently, will help in promoting exports of sectors from e-commerce, batteries for electric vehicles and farm equipment. Besides, another private report stated that narrowing current account deficit will help the rupee strengthen against the dollar and appreciate to around 79 by the second half of the current fiscal. Foreign fund inflows also aided domestic sentiments. The National Stock Exchange's provisional data showed foreign institutional investors (FII) bought shares worth Rs 321.93 crore on April 3. Traders overlooked a private survey report showing that growth in India's dominant services industry eased in the month of March 2023 from February's 12-year high due to a softer expansion in demand. The S&P Global India services Purchasing Managers' Index fell to 57.8 last month from 59.4 in February. But it stayed above the 50-mark separating growth from contraction for a 20th consecutive month. Finally, the BSE Sensex rose 582.87 points or 0.99% to 59,689.31 and the CNX Nifty was up by 159.00 points or 0.91% to 17,557.05.

The US markets ended mostly lower on Wednesday with Nasdaq settling over one percent cut. Concerns about the economic outlook weighed on the Nasdaq and the S&P 500 following the release of disappointing data. Payroll processor ADP released a report showing private sector employment increased by less than expected in the month of March. ADP said private sector employment rose by 145,000 jobs in March after climbing by an upwardly revised 261,000 jobs in February. Street had expected private sector employment to advance by 200,000 jobs compared to the addition of 242,000 jobs originally reported for the previous month. Meanwhile, a separate report released by the Institute for Supply Management (ISM) showed growth in U.S. service sector activity slowed by much more than expected in the month of March. The ISM said its services PMI slid to 51.2 in March from 55.1 in February. While a reading above 50 still indicates growth in the sector, street had expected the index to show a much more modest decrease to 54.5. On the economic data front, brokerage stocks showed a significant move to the downside on the day, dragging the NYSE Arca Broker/Dealer Index down by 1.9 percent. Considerable weakness was also visible among semiconductor stocks, as reflected by the 1.8 percent drop by the Philadelphia Semiconductor Index. The semiconductor index continued to give back ground after ending last Friday's trading at its best closing level in almost a year.

Crude oil futures ended marginally lower on Wednesday despite a data showed a drop in crude inventories in the U.S., and the production cut decision by the OPEC and allies. Data released by Energy Information Administration (EIA) showed crude inventories fell by 3.7 million barrels in the week ended March 31. The data also showed gasoline and distillate stockpiles dropped by 4.1 million barrels and 3.6 million barrels, respectively last week. Benchmark crude oil futures for May delivery lost $0.10 or nearly 0.12 percent to settle at $80.61 a barrel on the New York Mercantile Exchange. However, Brent crude for June delivery added $0.05 or 0.06 percent to settle at $84.99 a barrel on London's Intercontinental Exchange.

Indian Rupee ended higher against the US dollar on Wednesday as heavy buying in domestic equities bolstered investor sentiment. Traders got support with finance ministry's statement that gross direct tax collection in 2022-23 rose by around 20 per cent to Rs 19.68 lakh crore, buoyed by personal income tax collection. The gross tax collection exceeded the revised estimates (RE), set on February 1, by Rs 2.41 lakh crore or by 16.97 per cent. On the global front, dollar wallowed near two-month lows on Wednesday after weak data supported the view that the Federal Reserve may not need to raise rates much further, while the New Zealand dollar hit two-month highs after a larger-than expected rate hike. Finally, the rupee ended at 82.02 (Provisional), stronger by 30 paise from its previous close of 82.32 on Monday.

The FIIs as per Wednesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 5009.30 crore against gross selling of Rs 4451.16 crore, while in the debt segment, the gross purchase was of Rs 1216.96 crore against gross selling of Rs 1793.70 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.84 crore against gross selling of Rs 4.41 crore.

The US markets ended mostly in red on Wednesday on worries of a recession triggered by contraction in services PMI data. Asian markets are trading mostly lower on Thursday as investors await the release of key U.S. non-farm payroll report later in the day for directional cues. Indian markets ended higher with gains of around a percent each on Wednesday as weak U.S. economic data curbed expectations for further Fed tightening. Today, markets are likely to get cautious start amid lackluster global cues and ahead of the outcome of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) at around 10 A.M., followed by a press conference at noon. There are expectations that the RBI likely to raise its benchmark rate for the seventh consecutive meeting and leave the door open for more increases to bring inflation back within its target range. As per a private report, the central bank should focus on combating inflation until it is within the tolerance level of 6 per cent, even if it pares (down) growth. Besides, Finance ministry officials are of the view that the RBI should prioritise bringing inflation down within the mandated range of 2-6 per cent, even if economic growth is adversely impacted in the process. There will be some volatility in the markets ahead of weekly F&O expiry. However, some support may come later in the day as leading industry bodies said the Foreign Trade Policy (FTP) for 2023 announced recently will further boost business sentiments to reach the aspirational target of India becoming a leader in exports. Chairman of CII national committee on exports and imports Sanjay Budhia said that reduction in export performance threshold in the new FTP will enable exporters to achieve reduction in transaction costs for outbound cargo. Meanwhile, Finance Ministry has called a meeting of heads of Public Sector Banks (PSBs) on April 13 to review progress of various financial inclusion schemes, including Jan Suraksha and Mudra Yojana. The meeting is scheduled to be chaired by Financial Services Secretary Vivek Joshi. Sugar industry stocks will be in focus as industry body ISMA said India's sugar production fell 3 per cent to 299.6 lakh tonnes in the first six months of the 2022-23 marketing year ending September. Sugar output stood at 309.9 lakh tonnes in the corresponding period of the previous year. There will be some buzz in the banking stocks as RBI data showed that bank credit rose by 15 per cent year-on-year (YoY) in 2022-23 (FY23), against 9.6 per cent YoY in 2021-22 (FY22). FY23 credit growth is highest since 2011-12, when it was 19.3 per cent.

                               Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Oil and Natural Gas Corporation is stepping up a $7 billion investment over the next three-four years to reverse years of decline in oil and gas production. 
• Tata Motors has entered into partnership with Inchcape plc, a leading global automotive distributor, as their distributor for their commercial vehicles in Thailand.
• HCL Technologies has entered into a strategic alliance with Volante Technologies, the leading global provider of cloud payments and financial messaging solutions.
• Larsen & Toubro has secured multiple offshore packages for its Hydrocarbon Business from a prestigious client in the Middle East.