After hitting record levels, Indian equity benchmarks erased all the day's gains and closed marginally lower on Tuesday tracking losses in index majors Tech Mahindra, TCS, Maruti Suzuki and Reliance Industries amid a largely weak trend in global markets. After making cautious start, key indices traded flat with a positive bias, as traders found some solace with data from the Reserve Bank of India showed the government's Emergency Credit Line Guarantee Scheme (ECLGS) significantly boosted credit growth for the micro, small and medium enterprises (MSMEs) in the financial year ending March 2021 even as concerns about asset quality of this segment grew. Markets added gains in late morning session taking support from private report that business resumption activity continued to increase for the sixth straight week after the second wave-induced lockdowns started getting lifted. It noted that the Nomura India Business Resumption Index (NIBRI) rose up to 91.3 for the week ended June 4, from 86.3 the previous week, and is only 8.7 percentage points (pp) below pre-pandemic levels and 3.6 pp below pre-second wave level. However, Indian shares reversed course to tick marginally lower, as traders turned wary with SBI Research in its latest report stated that household debt has sharply jumped to 37.3 per cent of the Gross domestic product (GDP) in the pandemic year (FY21) from 32.5 per cent in FY20, confirming the deeper financial impact of COVID-19. It also warned that the ratio may rise further this fiscal due to the second wave of the pandemic. However, losses were limited as some optimism remained among traders with the Reserve Bank of India's (RBI) statement that the first purchase of government securities for an aggregate amount of Rs 20,000 crore under the G-sec Acquisition Programme (G-SAP 2.0) will be conducted on July 8, 2021. The RBI will purchase five government securities of different maturities through a multi-security auction using the multiple price method. Meanwhile, the government has decided not to impose anti-dumping on imports of certain copper products, used in the electrical industry, from China, Thailand, Korea and three other countries. In April, the commerce ministry's arm Directorate General of Trade Remedies (DGTR) recommended imposing the duty on copper and copper alloy flat-rolled products from China, Korea, Malaysia, Nepal, Sri Lanka and Thailand, after conducting a probe. Finally, the BSE Sensex fell 18.82 points or 0.04% to 52,861.18, while the CNX Nifty was down by 16.10 points or 0.10% to 15,818.25.

The US markets ended mostly lower on Tuesday. The pullback by the Dow and the S&P 500 was partly due to profit taking after the advance seen last Friday lifted all three major averages to new record closing highs. Negative sentiment have also been generated by a report from the Institute for Supply Management (ISM) showing its reading on service sector activity pulled back off a record high in June. The ISM said its services PMI slid to 60.1 in June from 64.0 in May, although a reading above 50 still indicates growth in the sector. Street had expected the index to edge down to 63.5. On the sectoral front, Energy stocks showed a substantial move to the downside on the day as the price of crude oil for August delivery tumbled $1.79 to $73.37 a barrel after reaching a six-year intraday high. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 5.6 percent and the NYSE Arca Oil Index plummeted by 3.5 percent. Considerable weakness was also visible among steel stocks, as reflected by the 2.9 percent slump by the NYSE Arca Steel Index. Airline, banking and natural gas stocks also saw significant weakness on the day, while retail stocks showed a strong move to the upside.

Crude oil futures ended lower on Tuesday amid uncertainty about the major oil producers' possible take on their production policy. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) were originally scheduled to decide on increasing crude production last Thursday. However, the meeting got postponed to the following day, and was subsequently abandoned due to disagreement between Saudi Arabia and the UAE over output hike. The United Arab Emirates agreed to go along with output increases but rejected a separate proposal to extend curbs to end-2022. No date has been set as yet for resumption of talks but Iraqi Oil Minister Ihsan Abdul Jabbar said he hoped that within 10 days a date would be set for a new OPEC+ meeting. Crude oil futures for August fell $1.79 or about 2.4 percent to settle at $73.37 barrel on the New York Mercantile Exchange. September Brent crude dropped $2.63 or 3.4 percent to settle at $74.52 a barrel on London's Intercontinental Exchange.

Indian rupee concluded substantially weaker against dollar on Tuesday, on account of sustained dollar demand from importers and banks. Sentiments were fragile as government has decided not to impose anti-dumping on imports of certain copper products, used in the electrical industry, from China, Thailand, Korea and three other countries. Traders were worried despite private report stated that the business resumption activity continued to increase for the sixth straight week after the second wave-induced lockdowns started getting lifted. It noted that the Nomura India Business Resumption Index (NIBRI) rose up to 91.3 for the week ended June 4, from 86.3 the previous week, and is only 8.7 percentage points (pp) below pre-pandemic levels and 3.6 pp below pre-second wave level. On the global front, dollar fell on Tuesday as traders wagered on a patchy U.S. job market holding interest rates low while the rest of the world reopens. Finally, the rupee ended 74.55, weaker by 24 paise from its previous close of 74.31 on Monday.

The FIIs as per Tuesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 4037.19 crore against gross selling of Rs 3598.30 crore, while in the debt segment, the gross purchase was of Rs 620.07 crore against gross selling of Rs 65.63 crore. Besides, in the hybrid segment, the gross buying was of Rs 20.73 crore against gross selling of Rs 15.88 crore.

The US markets ended mostly lower on Tuesday with financials and other groups closely tied to economic growth leading declines. Asian markets are trading mostly in red on Wednesday as concern over the economic recovery from the pandemic, virus variants and China's scrutiny of the technology sector sapped sentiment. Indian markets erased day's gains to end marginally lower on Tuesday dragged by selling in auto and IT stocks. Today, the markets are likely to make negative start tracking lackluster global cues. Traders will be concerned as India recorded a spike of 43,957 new infections, taking the total caseload to 30,662,896, according to Worldometer. The death count increased to 404,240 with 930 new fatalities, the data showed. There will be come cautiousness as goods and services tax collections fell below the Rs 1-trillion mark for the first time in nine month in June to a 10-month low, as economic activity got disrupted due to the second Covid-19 wave. However, some respite may come later in the day as External Affairs Minister S Jaishankar said India is coming out of the second wave of the coronavirus pandemic and it will witness a strong economic recovery and contribute to being an engine of growth for the global economy. Some support will come as the Reserve Bank of India (RBI) will conduct open market purchase of government bonds worth Rs 20,000 crore under the G-sec Acquisition Programme (G-SAP 2.0) on July 8. There will be some buzz in aviation stocks as credit rating agency ICRA in its report said domestic air passenger traffic was back to the growth trajectory in June amid the falling number of COVID-19 cases in the country with around three million passengers flying on local routes in the previous month as against around two million in May. There will be some reaction in real estate industry stocks with a private report stating that the economic uncertainty caused by the second wave of the coronavirus pandemic has forced real estate developers in India to adopt a more cautious approach towards spending, which is reflected in new supply numbers for the April-June period (Q2) of 2021. Meanwhile, two IPOs - Clean Science & Technology and GR Infraprojects - will open on Wednesday to raise a total of Rs 2,500 crore.

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

Nifty Top volumes

• Bharti Airtel has augmented its mobile network in Jammu and Kashmir and Ladakh to deliver the best indoor network experience to its customers by deploying 5 MHz in 900 MHz spectrum band for high-speed data services. 
• Tata Motors is planning to increase prices of its passenger vehicle range due to increase in input costs. 
• Tech Mahindra has partnered with StaTwig, Singapore and Hyderabad-based digital supply chain solution provider, to implement VaccineLedger globally. 
• Bajaj Finance's wholly owned subsidiary -- Bajaj Housing Finance is offering customers a Home Loan loaded with features.