Indian equity benchmarks bounced back from early lows to close higher on Tuesday helped by fag-end buying in Power, Utilities and Auto stocks. After making a cautious start, key gauges slipped into red due to weak global cues. Traders were anxious with report that the UK's decision to withdraw duty benefit scheme GSP may impact Indian exporters from certain labour-intensive sectors such as leather and textiles as they were the major beneficiaries. The UK is replacing the Generalised Scheme of Preferences (GSP) with a new Developing Countries Trading Scheme (DCTS) from June 19. Some concern also came with private report stating that private equity and venture capital funds' investment in the country continued to fall in May, with the overall values declining by nearly 44 per cent to $3.5 billion. Besides, foreign fund outflows dented domestic sentiments. As per the data, foreign institutional investors (FII) sold shares worth Rs 1,030.90 crore on June 19. However, key indices reversed all of their initial losses to advance in the last leg of trade, as traders got some relief amid reports that formal job creation under the Employees' State Insurance Scheme registered a month-on-month growth of 2.8% in April with the addition of 1.78 million net new employees compared to 1.73 million formal workers added in March. Some support also came as the government said India and the UK concluded the tenth round of talks for a proposed free trade agreement (FTA) last week, and the next round of negotiations is due to take place in the coming month. Meanwhile, the government has started interministerial discussions on the upcoming Insolvency and Bankruptcy (IBC) amendment Bill, which proposes an overhaul of the law. The Bill proposes a separate framework for real estate insolvency with certain exemptions. Finally, the BSE Sensex rose 159.40 points or 0.25% to 63,327.70 and the CNX Nifty was up by 61.25 points or 0.33% to 18,816.70.

The US markets ended lower on Tuesday as traders continued to cash in on recent strength in the markets, which lifted the Nasdaq and the S&P 500 to their best levels in over a year last week. Further, traders looked ahead to congressional testimony by Federal Reserve Chair Jerome Powell. Powell is due to testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday. Traders may pay close attention to Powell's remarks, looking for additional clues about the outlook for rates after the Fed signaled further rate hikes last week. on the sectoral front, Gold stocks saw substantial weakness on the day, dragging the NYSE Arca Gold Bugs Index down by 4.0 percent to a three-month closing low. The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for August delivery tumbling $23.50 to $1,947.70 an ounce. On the economic data front, a report released by the Commerce Department showed new residential construction in the U.S. unexpectedly skyrocketed in the month of May. The Commerce Department said housing starts soared by 21.7 percent to an annual rate of 1.631 million in May after tumbling by 2.9 percent to a revised rate of 1.340 million in April. Street had expected housing starts to edge down to a rate of 1.400 million from the 1.401 million originally reported for the previous month. The report said building permits also surged by 5.2 percent to an annual rate of 1.491 million in May after slumping by 1.4 percent to a revised rate of 1.417 million in April. Building permits, an indicator of future housing demand, were expected to rise to a rate of 1.423 million from the 1.416 million originally reported for the previous month.

Crude oil futures ended lower on Tuesday on concerns about the outlook for energy demand owing to the economic slowdown in China. Disappointment with the size of cuts with China's key lending rates hurt crude oil prices. The People's Bank of China cut two key policy rates, including a benchmark for corporate loans and another used to price mortgages by 10 basis points each, the first such reductions in 10 months in an effort to bolster economic growth. Besides, fears of further tightening by the Federal Reserve and other central banks and the likely impact on global economic growth weighed as well on oil prices. Benchmark crude oil futures for July delivery fell $1.28 or about 1.8 percent to settle at $70.50 a barrel on the New York Mercantile Exchange. Brent crude for August delivery dropped $0.19 or 0.3 percent to settle at $75.90 a barrel on London's Intercontinental Exchange. 

Indian rupee ended weaker against the US dollar on Tuesday amid fresh foreign capital outflows and rising crude prices in the international market. Some cautiousness came in with report that the UK's decision to withdraw duty benefit scheme GSP may impact Indian exporters from certain labour-intensive sectors such as leather and textiles as they were the major beneficiaries. The UK is replacing the Generalised Scheme of Preferences (GSP) with a new Developing Countries Trading Scheme (DCTS) from June 19. On the global front, the pound traded lower against the dollar and the euro on Tuesday, as money market traders awaited pivotal inflation data due on Wednesday, ahead of the Bank of England's monetary policy meeting this week. Finally, the rupee ended at 82.12 (Provisional), weaker by 18 paise from its previous close of 81.94 on Monday.

The FIIs as per Tuesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 9769.16 crore against gross selling of Rs 8012.95 crore, while in the debt segment, the gross purchase was of Rs 82.59 crore against gross selling of Rs 316.60 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.53 crore against gross selling of Rs 9.88 crore.

The US markets ended lower on Tuesday as investors took a breather from last week's market rally. Asian markets are trading mostly in red on Wednesday tracking overnight losses on Wall Street. Indian markets bounced back from early lows to close higher in a volatile session on Tuesday helped by fag-end buying in IT, teck, power and utilities shares. Today, markets are likely to get cautious start as investors await US Federal Reserve chair, Jerome Powell's, semi-annual testimony to the Congress later in the day. Foreign fund outflows likely to dent domestic sentiments. Provisional data from the National Stock Exchange shows foreign institutional investors (FII) sold shares worth Rs 1,942.62 crore on June 20. There will be some cautiousness with a private report that though few fear a moderate rain deficit to impact inflation, an intense El Nino that severely disrupts the monsoon could push inflation up by 15-20 basis points by boosting food prices. Another private report stated that foodgrain prices for kitchen staples such as rice and rice products, and even chicken have increased by 5-15 per cent in a fortnight due to monsoon delays. However, some support may come later in the day as the India Meteorological Department (IMD) said that India's stalled monsoon is likely to gain momentum in the next 3-4 days and could cover key rice, soybean, cotton and sugarcane growing regions in the southern, central and western states. Traders may take note of report that retail inflation for farm workers and rural labourers eased to 5.99 per cent and 5.84 per cent, respectively, in May. Meanwhile, the RBI said its recent instructions on compromise settlements and technical write-offs have rationalised the existing regulatory guidance to banks and tightened some of the related provisions to ensure greater transparency. There will be some reaction in cement industry stocks as Crisil in its report stated that cement prices are expected to slip 1-3% this fiscal, after clocking a 4% compound annual growth rate (CAGR) over the past four to a new all-time high of Rs 391 per 50 kg bag last fiscal. It added the run-up was due to disruptions caused by Covid-19, followed by a sharp surge in input costs, especially thermal coal, further aggravated by the Russia-Ukraine war.

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

Nifty Top volumes

• ITC has entered into definitive agreements to acquire further 857 Compulsorily Convertible Preference Shares of Rs 10 each of Mother Sparsh on June 19, 2023. 
• Sun Pharmaceutical Industries' wholly owned subsidiary -- Sun Pharma Canada Inc. has received Health Canada's approval for WINLEVI (clascoterone cream 1%). 
• The government is planning to sell up to 92.44 lakh shares or 0.15 per cent stake in Coal India to its employees at a price of Rs 226.10 a share. 
• Bharti Airtel has entered into strategic partnership with Matter Motor Works to deploy Airtel's IoT solution in Matter AERA, India's first and only geared electric motorbike.