Key benchmark indices reversed early gains and ended in the red on Wednesday, amid profit-taking ahead of the Industrial Production and Retail Inflation data to be out later in the day. Markets made slightly positive start as traders took support with provisional data from the National Stock Exchange (NSE) showing that foreign institutional investors (FII) bought shares worth Rs 1,197.38 crore on July 11. However, volatility struck bourses in late morning deals, as traders got cautious with a private report stating that spiraling prices of tomato, onion and pulses are emerging as new risks for India's retail inflation, reaffirming expectations of a hawkish hold from the central bank for the rest of the year. After moderating for four months, consumer price inflation probably accelerated to 4.6% in June. Markets witnessed a sharp dip in the last hour of the trade, as traders were cautious with a private report stating that unprecedented rains and floods in the northern region in the past few days have not only caused extensive damage to lives and property but have also impacted business and commercial establishments. Vegetable prices have gone through the roof in the national capital and many other parts of the country since rains started pouring earlier this month. Sentiments also remained dampened amid a private report stating that deal making by India Inc has suffered severely due to economic challenges in the first half of this year. There were only 676 deals with an underlying value of $23 billion in the January-June 2023 period, 78 per cent down in value terms and a fall of 42 per cent in terms of volume. Finally, the BSE Sensex fell 223.94 points or 0.34% to 65,393.90 and the CNX Nifty was down by 55.10 points or 0.28% to 19,384.30.

The US markets ended higher on Wednesday following the release of a highly anticipated Labor Department report showing consumer prices increased by less than expected in the month of June. The Labor Department said its consumer price index rose by 0.2 percent in June after inching up by 0.1 percent in May. Street had expected consumer prices to climb by 0.3 percent. Excluding food and energy prices, core consumer prices still increased by 0.2 percent in June after rising by 0.4 percent in May. Core consumer prices were also expected to rise by 0.3 percent. The report also showed the annual rate of consumer price growth slowed to 3.0 percent in June from 4.0 percent in May. Street had expected the rate of growth to slow to 3.1 percent. The annual rate of core consumer price growth also decelerated to 4.8 percent in June from 5.3 percent in May. The rate of growth was expected to slow to 5.0 percent. While the Federal Reserve is still widely expected to raise interest rates by another quarter point later this month, the data has led to renewed optimism that will be the end of the central bank's rate-hiking cycle. On the sectoral front, gold stocks turned in some of the market's best performances on the day, resulting in a 5.2 percent spike by the NYSE Arca Gold Bugs Index. With the surge, the index reached its best closing level in over a month. The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for August delivery soaring $24.60 to $1,961.70 an ounce. Easing interest rate concerns also contributed to substantial strength among housing stocks, as reflected by the 2.1 percent jump by the Philadelphia Housing Sector Index. Steel, semiconductor and chemical stocks also saw considerable strength on the day, while airline stocks came under pressure over the course of the session.

Crude oil futures ended higher on Wednesday following the release of a highly anticipated Labor Department report showing consumer prices increased by less than expected in the month of June. The report also showed a notable slowdown in the annual rate of consumer price growth, easing concerns about the outlook for interest rates. Meanwhile, traders largely shrugged off a report from the Energy Information Administration showing crude oil inventories jumped by much more than expected in the week ended July 7th. The report showed crude oil inventories shot up by 5.9 million barrels last week compared to street estimates for an uptick of about 0.5 million barrels. Benchmark crude oil futures for August delivery rose $0.92 or about 1.22 percent to settle at $75.75 a barrel on the New York Mercantile Exchange. Brent crude for September delivery surged $0.71 or 0.89 percent to settle at $80.11 a barrel on London's Intercontinental Exchange.

Rising for the third straight session, Indian rupee ended higher against the US dollar on Wednesday, as weakness in the American currency overseas and steady foreign fund inflows boosted investor sentiment. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) bought shares worth Rs 1,197.38 crore on July 11. However, a surge in crude oil prices capped the gains in the local unit. On the global front, dollar continued its slide ahead of U.S. inflation data that could potentially support bets of the Federal Reserve not hiking interest rates beyond July this year. Finally, the rupee ended at 82.27 (Provisional), higher by 14 paise from its previous close of 82.41 on Tuesday.

The FIIs as per Wednesday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 10857.28 crore against gross selling of Rs 9388.13 crore, while in the debt segment, the gross purchase was of Rs 1107.75 crore against gross selling of Rs 786.07 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.20 crore against gross selling of Rs 8.20 crore.

The US markets ended higher on Wednesday, buoyed by cooler-than-expected inflation report. Data raised hope that the Federal Reserve can bring down inflation without pushing the U.S. economy into a recession. Asian markets are trading higher in early deals on Thursday following positive cues from global markets overnight.  Indian equity markets ended lower on Wednesday as investors awaited key earnings as well as domestic industrial output and inflation data for direction. Today, markets are likely to make positive start on firm global cues.  Traders may get support as the U.S. inflation rate for June came in lower than expected at 3%, the smallest increase in two years. On the domestic front, there may be some encouragement as the Index of Industrial Production (IIP) recovered to a three-month high of 5.2 per cent in May, despite a high-base effect, due to good performance by manufacturing, mining and electricity sectors. However, there may be some cautiousness later in the day as India's retail inflation reversed its four-month downward trend in June on surging food prices, though it remained within the Reserve Bank of India's (RBI's) upper tolerance limit. The Consumer Price Index (CPI)-based inflation rate rose to a three-month high of 4.81 per cent year-on-year (YoY) in June, as against 4.31 per cent in the previous month, because of a sharp increase in the prices of food & beverages and services. Traders may take note of report that Reserve Bank of India said India's outward foreign direct investment (FDI) halved to just below the $ one billion mark in June 2023 from $ 1.93 billion in June 2022. Sequentially also FDI declined from $ 1.29 billion in May 2023. The outward FDI expressed as total financial commitment has three components - equity, loan and guarantees issued. The commitments (outward FDI) stood at $ 2.44 billion in April 2023. There will be some buzz in Gems and Jewellery industry related stocks as the government imposed import restrictions on certain gold jewellery and articles, a move which would help cut import of non-essential items. Now an importer would need a permission of licence from the government for importing these gold products.

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

Nifty Top volumes

• Tata Steel has joined hand with Leadership Group for Industry Transition and will be collaborating with countries and companies striving for net-zero emissions in heavy industry.
•  Maruti Suzuki India has introduced FRONX S-CNG in their premium retail channel NEXA.
•  Wipro has launched Wipro ai360, a comprehensive, AI-first innovation ecosystem that builds on Wipro's decade-long investments in artificial intelligence.
•  Bharti Airtel has entered into an agreement for acquisition of additional 20.6% stake in Lavelle Networks.