Continuing their upward momentum for the second day, Indian equity benchmarks ended higher by over half percent on Tuesday, amid positive global and domestic cues. Markets made an optimistic start and stayed in green for whole day, as the latest retail inflation and industrial output data painted a positive picture of the domestic economy. India's retail inflation eased to a more than two-year low of 4.25 percent in May while industrial output rebounded from a five-month low to grow 4.2 percent in April. Some support also came with Commerce and Industry Minister Piyush Goyal's statement that India and the UAE look to more than double non-oil bilateral trade to $100 billion by 2030. At present, the non-oil bilateral trade stands at $48 billion. Markets magnified their gains in late afternoon deals, as traders took encouragement with Chief Economic Advisor (CEA) to the Government of India, V Anantha Nageswaran's statement that the real gross domestic product (GDP) growth for the year ending March 2023 (FY23) was 7.2 per cent, which surpassed expectations, as the underlying momentum in the economy was quite strong. Sentiments remained positive, as the Union Government released 3rd installment of tax devolution to State Governments amounting to Rs 1,18,280 crore on June 12, 2023, as against normal monthly devolution of Rs 59,140 crore. One advance installment in addition to the regular installment due in June 2023 is being released to States to enable them to speed up capital spending, finance their development/ welfare related expenditure and also to make available resources for priority projects/ schemes. Finally, the BSE Sensex rose 418.45 points or 0.67% to 63,143.16 and the CNX Nifty was up by 114.65 points or 0.62% to 18,716.15.

The US markets ended higher on Tuesday after the Labor Department released its highly anticipated report on consumer price inflation in the month of May, showing prices edged slightly higher. The Labor Department said the consumer price index inched up by 0.1 percent in May after climbing by 0.4 percent in April. Street had expected prices to tick up by 0.2 percent. Excluding food and energy prices, core consumer prices rose by 0.4 percent in May, matching the increase seen in each of the two previous months as well as Street estimates. The Labor Department also said the annual rate of consumer price growth slowed to 4.0 percent in May from 4.9 percent in April. Street had expected the pace of growth to slow to 4.1. The year-over-year growth in May marked the smallest annual increase since the period ending March 2021. The annual rate of core consumer price growth also slowed to 5.3 percent in May from 5.5 percent in April, in line with expectations. The data added to optimism about the Federal Reserve pausing its recent interest rate increases when the central bank announces its monetary policy decision on Wednesday. On the sectoral front, Steel stocks moved sharply higher after China's central bank unexpectedly lowered a short-term lending rate, resulting in a 2.3 percent surge by the NYSE Arca Steel Index. The index reached a nearly two-month closing high. Considerable strength was also visible among chemical stocks, driving the S&P Chemical Sector Index up by 2.2 percent to its best closing level in well over a month. Oil service stocks also saw significant strength amid a rebound by the price of crude oil, with the Philadelphia Oil Service Index climbing by 1.7 percent.

Crude oil futures ended sharply higher on Tuesday after data showing a slowdown in U.S. inflation raised expectations the Fed will pause rate increases. Data from the Labor Department showed the consumer price index inched up by 0.1% in May after climbing by 0.4% in April. Street had expected prices to tick up by 0.2%. Further, oil prices also rose as the People's Bank of China announced a surprise rate cut. The PBoC cut the seven-day reverse repo rate to 1.9% from 2%. This was the first lowering since a similar size reduction in August last year. Benchmark crude oil futures for July delivery rose $2.30 or about 3.4 percent to settle at $69.42 a barrel on the New York Mercantile Exchange. Brent crude for August delivery surged $2.45 or 3.4 percent to settle at $74.29 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against the American currency on Tuesday as a weak greenback overseas and strong macroeconomic data supported investors' sentiments. India's Retail inflation declined to a 25-month low of 4.25 per cent in May mainly on account of softening prices of food and fuel items. Besides, industrial production growth rose to 4.2 per cent in April from 1.7 per cent in March 2023, mainly due to good performance by the manufacturing. On the global front, Sterling rose on Tuesday as new figures showed wages in Britain's labour market grew sharply and unemployment unexpectedly fell, feeding expectations that the Bank of England will keep raising interest rates this year. Finally, the rupee ended at 82.38 (Provisional), higher by 5 paise from its previous close of 82.43 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 6336.47 crore against gross selling of Rs 6930.90 crore, while in the debt segment, the gross purchase was of Rs 628.60 crore against gross selling of Rs 393.23 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.91 crore against gross selling of Rs 9.15 crore.

The US markets ended higher on Tuesday after a cooler-than-expected CPI inflation refueled expectations of a pause in rate hike by the US Fed later tonight. Asian markets are trading mostly in green on Wednesday ahead of the Fed and ECB meetings. Indian markets ended at intra-day high levels on Tuesday as positive macro data raised optimism about the growth outlook. Today, start of the session is likely to be positive propelled by firm cues from global counterparts. All eyes would be on US Fed's FOMC meeting outcome scheduled tomorrow after the US inflation data came at a two-year low. India's WPI or wholesale inflation for May will also be closely tracked by market participants. Foreign fund inflows likely to aid domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) purchased shares worth net Rs 1,677.60 crore on June 13. Traders will be taking encouragement with Reserve Bank of India (RBI) Governor Shaktikanta Das' statement that the disinflation process in India is likely to be slow and protracted with convergence to the inflation target of 4 per cent likely to be achieved over the medium-term. Meanwhile, the Securities and Exchange Board of India (Sebi) has introduced a regulatory framework for online investment platforms that facilitate investments in commission-free mutual fund (MF) schemes.  Adani group stocks will be in focus with a private report that the group is in talks with lenders, including global banks, as it seeks to refinance up to $3.8 billion of a loan facility taken for its acquisition of Ambuja Cements last year. There will be some reaction in power stocks with report that the National Committee on Transmission (NCT) has approved a record Rs 64,000 crore worth of six power transmission projects for connecting green energy installations. The projects are likely to be awarded this year through the bidding route. Auto stocks will be in limelight with report that the Indian automotive industry posted an 8 percent growth in production of vehicles across categories for the month of May, with three-wheelers (20 per cent) and passenger vehicles (16 per cent) leading the pack, amid better semiconductor chip supplies.

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

Nifty Top volumes

• JSW Steel has reported the crude steel production for the month of May 2023 at 21.78 lakh tonnes, that grew by 7% as against 20.30 lakh tonnes in May 2022 on consolidated basis. 
• Larsen & Toubro's Hydrocarbon business has secured an offshore project from a prestigious overseas client. 
• Tech Mahindra has entered into a partnership with Espressive, a pioneer in automating digital workplace assistance. 
• HDFC has planned to raise Rs 10,000 crore by issuing non-convertible debentures on a private placement basis to shore up its resources.