Indian equity benchmarks erased initial losses to end flat with positive bias on Tuesday, ahead of the Reserve Bank of India's interest rate decision. After making a cautious start, key gauges soon drifted lower as the day progressed as foreign fund outflows dented sentiments in markets. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 700.98 crore on Monday, according to exchange data. Some concern came with report that India's monsoon onset over the southernmost Kerala coast is delayed by another two-three days because the formation of cyclonic circulation in the Arabian Sea has reduced cloud cover over the Kerala coast. However, a sharp recovery in the last half an hour helped markets to cut all the losses. Traders took some support with private report stating that India's GDP growth will track above 6 per cent in the next two financial years, supported by strength in domestic demand. It pegged growth for 2023-24 and 2024-25 at 6.2 per cent and 6.5 per cent, respectively. Some support also came as a Reserve Bank of India (RBI)-appointed panel has recommended hosts of customer-centric initiatives for banks, including online settlement of claims by heirs of deceased account holders, flexibility for submission of life certificates by pensioners and a centralised KYC database. Finally, the BSE Sensex rose 5.41 points or 0.01% to 62,792.88 and the CNX Nifty was up by 5.15 points or 0.03% to 18,599.00.

The US markets ended higher on Tuesday despite traders remained reluctant to make significant moves as they continued to look ahead to next week's Federal Reserve meeting. The Fed is due to announce its latest monetary policy decision next Wednesday, with the central bank widely expected to pause its recent series of interest rate hikes. Key inflation reports are also likely to be in the spotlight next week, as the data could impact whether the Fed resumes its rate hikes next month. A lack of major U.S. economic data also kept traders on the sidelines, although reports on the U.S. trade deficit and weekly jobless claims may attract some attention in the coming days. On the sectoral front, airline stocks moved sharply higher on the day, with the NYSE Arca Airline Index soaring by 3.6 percent to its best closing level in almost a year. Substantial strength was also visible among housing stocks, as reflected by the 3.2 percent surge by the Philadelphia Housing Sector Index. The index jumped to a well over one-year closing high. Banking stocks also showed a significant move to the upside, driving the KBW Bank Index up by 3.0 percent to its best closing level in over a month. Tobacco, steel and brokerage stocks also saw considerable strength on the day, while healthcare stocks moved to the downside.

Crude oil futures ended lower on Tuesday as concerns about the outlook for energy demand due to economic slowdown and interest rate hikes outweighed Saudi Arabia's decision to cut production by one million barrels per day in July. The U.S. services sector barely growth in May and new orders for manufactured goods rose by slightly less than expected in April, rekindling concerns about inflation and a potential recession. besides, German factory orders data as well as Eurozone and British retail sales figures all disappointed - adding to cautious market mood. Benchmark crude oil futures for July delivery declined $0.41 or about 0.60 percent to settle at $71.74 a barrel on the New York Mercantile Exchange. Brent crude for August delivery fell $0.42 or 0.60 percent to settle at $76.29 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against the American currency on Tuesday. Traders got support after a private report stated that India's GDP growth will track above 6 per cent in the next two financial years, supported by strength in domestic demand. It pegged growth for 2023-24 and 2024-25 at 6.2 per cent and 6.5 per cent, respectively. On the global front, pound slipped on Tuesday as data showed that British house building wilted in May and the dollar found a footing. Russian rouble steadied near 81 against the dollar on Tuesday, showing limited reaction to the breaching of a major Soviet-era dam in the Russian-controlled part of southern Ukraine. Finally, the rupee ended at 82.62 (Provisional), marginally higher by 1 paisa from its previous close of 82.63 on Monday.

The FIIs as per Tuesday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 7771.87 crore against gross selling of Rs 8284.73 crore, while in the debt segment, the gross purchase was of Rs 877.91 crore against gross selling of Rs 418.22 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.44 crore against gross selling of Rs 30.78 crore.

The US markets ended higher on Tuesday, helped by some advances in economically sensitive sectors, as investors awaited inflation data and the Federal Reserve's policy meet next week. Asian markets are trading mostly in green on Wednesday as the region looks to China's May trade data and a speech from Reserve Bank of Australia governor Philip Lowe, a day after Australia's central bank defied expectations and raised its benchmark interest rate to its highest in 11 years. Indian benchmarks -- BSE Sensex and Nifty -- closed marginally higher in a volatile session on Tuesday as fag-end buying in auto, industrial and commodity stocks helped the indices extend gains for a third straight day. Today, markets are likely to get positive start on the back of largely optimistic moves across the global markets and ahead of the Reserve Bank of India's monetary policy meeting outcome tomorrow on June 8, 2023. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) bought shares worth Rs 385.71 crore on June 6, provisional data from the National Stock Exchange shows. However, there may be some cautiousness as the World Bank said Growth in India is expected to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January, but noted there is an unexpected resilience in private consumption and investment and robust growth in the services. Insurance sector stocks will be in limelight as the latest data released by the General Insurance Council showed that Non-insurance sector reported an 18.06 per cent rise year-on-year to Rs 18,031.48 crore for May (excluding specialised companies, Agricultural Credit Insurance Company of India, and ECGC).  Pharma stocks will be in focus as World Health Organization's (WHO) Chief Scientist Jeremy Farrar said India played an integral role globally in the development of vaccines and manufacturing of drugs, diagnostics, and therapeutics in the three years of the Coronavirus pandemic. There will be some reaction in aviation industry stocks as international airlines' grouping IATA's chief Willie Walsh said India is a fantastic potential market for aviation but not a cheap market to operate as taxation is higher in the country than in many other places. Meanwhile, the FICCI-YES Bank report on e-mobility said India will have 87 per cent electric vehicle (EV) penetration in new vehicle sales and 85 per cent localisation of the XEV value chain by 2047.

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

Nifty Top volumes

• TCS has launched TCS Dexam data marketplace platform on Google Cloud. 
• The government has received Rs 4,185 crore through a 3 per cent stake sale in Coal India. 
• Wipro has received an approval from shareholders for a share buyback programme worth Rs 12,000 crore. 
• L&T's construction arm -- L&T construction has secured EPC orders in India for its Buildings & Factories Business.