Indian equity benchmarks made a strong comeback to recover the previous day's losses on Wednesday and ended with gains of around two percent, amid broad-based gains, led by Realty, Metal and Basic Materials stocks. After a gap up opening, indices showed strength throughout the session, as traders took encouragement with the Ministry of Finance's statement that the Indian economy is well prepared to handle any capital outflows caused by external shocks. In its Monthly Economic Review report released the finance ministry's Department of Economic Affairs said India has adequate foreign exchange reserves to absorb the risks posed by the uncertain geopolitical environment. Some support also came as Minister of State for Finance Bhagwat Karad stating that banks have effected an aggregate recovery of Rs 7.34 lakh crore, in non-performing assets and written-off loan accounts, including those reported as fraud during the past six financial years and the first six months of the current financial year (FY22). Key indices extended gains in the last hour of trade, as sentiments were further supported by the cool-off in the oil prices, and the progress on the peace talk between Russia and Ukraine conflict. Some optimism also came with Automotive Component Manufacturers Association of India's (ACMA's) President Sunjay J Kapur stated that the approval granted by the government to 75 auto component manufacturers for incentives under the production-linked incentive (PLI) scheme will act as a catalyst in the transformational journey from a conventional industry to a mobility industry. Traders took note of report that the government said it is keeping a close watch on evolving geopolitical developments and would make calibrated interventions to keep fuel prices under control to safeguard the interest of the common man. Meanwhile, Finance Minister Nirmala Sitharaman has said that Rs 53,661 crore of Goods and Services Tax (GST) compensation for the current fiscal (FY22) is yet to be released to the states. This include Rs 11,563 crore to be released to Maharashtra, Rs 6,954 crore to Uttar Pradesh, Rs 6,733 crore to Tamil Nadu, Rs 5,461 crore to Delhi and Rs 4,292 crore to West Bengal. Finally, the BSE Sensex rose 1039.80 points or 1.86% to 56,816.65 and the CNX Nifty was up by 312.35 points or 1.87% to 16,975.35.

The US markets ended higher on Wednesday after the Fed announced its widely expected decision to raise interest rates for the first time since December of 2018 in an effort to combat inflation at 40-year highs.  The Fed said it has decided to raise the target range for the federal funds rate by 25 basis points to 0.25 to 0.5 percent. The central bank also predicted ongoing rate hikes will be appropriate, with the Fed's latest projections pointing to an interest rate of 1.9 percent by the end of the year.Additionally, the Fed said it expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting. The Fed said with appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. The decision to raise rates by 25 basis points was nearly unanimous, although St. Louis Fed President James Bullard preferred a 50 basis point increase. Meanwhile, optimism about a potential diplomatic solution to the ongoing Russia-Ukraine conflict also generated additional buying interest. Ukrainian President Volodymyr Zelenskyy said that the positions in the negotiations were beginning to sound more realistic, while Russian Foreign Minister Sergey Lavrov said there was some hope of reaching a compromise.

Crude oil futures ended lower on Wednesday, magnifying their previous session's losses, after data showed a surprise surge in US crude inventories. Data released by US Energy Information Administration (EIA) showed crude oil inventories in the US rose by 4.345 million barrels last week, as against expectations for a draw of 1.375 million barrels. The EIA data also showed that distillate stock piles increased by 0.332 million barrels in the week, compared to expectations for a drop of 1.826 million barrels, while gasoline inventories dropped by 3.616 million barrels, more than twice the expected decline of 1.579 million barrels. Benchmark crude oil futures for April delivery fell $1.40 or 1.5 percent to settle at $95.04 a barrel on the New York Mercantile Exchange. Brent crude for May delivery dropped $1.74 or 1.7 percent to settle at $94.70 a barrel on London's Intercontinental Exchange.

Indian rupee ended stronger against dollar on Wednesday due to fresh selling of the American currency by banks and exporters and healthy equity markets. Sentiments were supported by a retreat in commodity prices and hopes for a possible diplomatic solution to end the war in Ukraine. Ukrainian President said that the positions of Ukraine and Russia at peace talks were sounding more realistic but more time was needed. Meanwhile, investors also awaited a widely anticipated rate decision by the U.S. Federal Reserve later in the day amid the Russia-Ukraine crisis. The U.S. central bank likely to raise its key short-term rate by 0.25 percentage points, marking the first increase since 2018. On the global front, euro jumped on Wednesday and was set for its third consecutive daily gains versus the dollar after Russian Foreign Minister Sergei Lavrov said peace talks with Ukraine were not easy but there was hope for compromise. Finally, the rupee ended at 76.20 (Provisional), stronger by 42 paise from its previous close of 76.62 on Tuesday.

The FIIs as per Wednesday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 10314.13 crore against gross selling of Rs 11418.90 crore, while in the debt segment, the gross purchase was of Rs 444.23 crore against gross selling of Rs 638.40 crore. Besides, in the hybrid segment, the gross buying was of Rs 12.80 crore against gross selling of Rs 12.44 crore.

The US markets ended higher on Wednesday as investors shrugged off initial jitters following the U.S. Federal Reserve's interest rate increase and its signal that more hikes would be needed to fight inflation, ending the pandemic-era's easy monetary policy. Asian markets are trading in green on Thursday joining a rally on Wall Street overnight. Indian markets made a comeback on Wednesday after a day's breather. Gains across sectors pushed the headline indices higher, with financial, IT and oil & gas shares being the biggest movers. Today, markets are likely to continue their northward journey with yet another gap-up opening as global markets rally after US Fed's first interest rate hike in three years was announced late night on Wednesday. Traders will be taking encouragement with a private report stating that private equity and venture capital investments for the month of February 2022 were about $5.8 billion, 2.3 times the value recorded in February 2021 ($2.5 billion) and 24 per cent higher than investments in January 2022 ($4.6 billion). Some support will come as the income tax department said income tax refunds worth over Rs 1.92 lakh crore have been issued to more than 2.24 crore taxpayers so far this fiscal. Traders may take note of report that apex exporters' body FIEO has approached the government to roll out a freight subsidy scheme for micro, small and medium enterprises (MSMEs), at least temporarily, to blunt the impact of a spike in shipping costs in the wake of the Russia-Ukraine crisis. Meanwhile, the bilateral trade in goods is projected to increase from the current $60 billion to $100 billion annually within five years of the implementation of the India-UAE free trade agreement. However, there may be some cautiousness as S&P Global Ratings said large oil importers like India and Thailand will be the most affected among Asia-Pacific countries by the ongoing Russia-Ukraine war. There will be some buzz in power stocks as Power Minister R K Singh said electricity demand can beat all previous records and cross the 200 GW mark in March itself in view of soaring temperatures. Infrastructure industry stocks will be in limelight with report that after having dropped to a five-year low in December, the pace of national highway construction increased from 20.17 kilometres (km) a day to 24.08 km. There will be some reaction in aviation industry stocks with report that Jet fuel prices were hiked by over 18 per cent - the steepest ever increase - to all-time high levels after international oil price surged to a multi-year high. The increase - sixth straight this year - led to prices soaring past the Rs 1-lakh-per-kilolitre mark for the first time ever.

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

Nifty Top volumes

• ICICI Bank has entered into partnership with Emirates Skywards, the award-winning loyalty programme of Emirates and flydubai, to launch a range of co-branded credit cards. 
• ITC has acquired 1,040 Compulsorily Convertible Preference Shares of Rs 10 each of Mother Sparsh Baby Care in the second tranche. 
• Maruti Suzuki India has rolled-out a new Customer Convenience Package for its customers. 
• Eicher Motors' motorcycle arm -- Royal Enfield has launched its new bike model Scram 411 with introductory prices starting at Rs 2.03 lakh (ex-showroom Chennai).