Indian equity benchmarks swung between gains and losses and settled flat on Tuesday as investors traded cautiously, awaiting cues from the US Federal Reserve's policy stance. Elevated level of crude oil prices also weighed on the investor sentiment. Markets made a positive start but soon turned volatile amid foreign fund outflows. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 82.96 crore on July 24, 2023. Traders also were cautious with a private report that the recent rise in inflation has prompted Indian investors to push back rate cut expectations by at least a quarter to the middle of 2024, with a sustained rise in prices likely to prompt a further repricing. Some concern also came with a private report stating that Indian fintech start-ups raised a total of $1.4 billion in the first half (H1) of 2023, a massive year-on-year (YoY) drop of 67 per cent from $4.3 billion raised in the same period last year. However, traders got some support as British Parliamentarian Lord Karan Bilimoria has predicted that India will become the world's largest economy by 2060. He said India has overtaken the United Kingdom and it's now the fifth largest economy in the world. Traders also took a note of the commerce ministry's statement that India and the UK have concluded the 11th round of negotiations for a proposed free trade agreement (FTA). India and the UK are working to iron out differences on issues like intellectual property rights (IPRs) and rules of origin under the agreement, negotiations for which were started in January 2021. Meanwhile, the Securities and Exchange Board of India (Sebi) is working on an ambitious plan to settle secondary market trades on a real-time basis. Finally, the BSE Sensex fell 29.07 points or 0.04% to 66,355.71 and the CNX Nifty was up by 8.25 points or 0.04% to 19,680.60.

Magnifying last session's gains, the US markets ended higher on Tuesday. The higher close on markets partly reflected a positive reaction to the latest batch of earnings news from big-name companies. The uptick by the Dow came amid a strong gain by shares of 3M (MMM), which spiked by 5.3 percent after the industrial conglomerate reported better than expected second quarter results and raised its full-year profit forecast. Chemical giant Dow Inc. (DOW) also jumped by 1.8 percent after reporting second quarter results that exceeded expectations on both the top and bottom lines. Shares of General Electric (GE) also soared by 6.3 percent after the industrial giant reported better than expected second quarter earnings and boosted its full-year profit guidance. Besides, traders also remained optimistic about the Federal Reserve wrapping up its recent series of interest rate hikes ahead of Wednesday's monetary policy decision. The Fed is widely expected to raise interest rates by another 25 basis points, but traders are hopeful the rate hike will be the last following recent encouraging inflation data. On the economic data front, the Conference Board released a report showing U.S. consumer confidence improved by much more than expected in the month of July. The Conference Board said its consumer confidence index jumped to 117.0 in July from an upwardly revised 110.1 in June. Street had expected the index to climb to 111.8 from the 109.7 originally reported for the previous month. With the much bigger than expected surge, the consumer confidence index reached its highest level since July 2021.

Crude oil futures ended higher on Tuesday, extending previous session's gains. Optimism about increased Chinese demand after policymakers pledged support to shore up growth in the world's second largest economy pushed up oil prices. Further, a somewhat subdued dollar also contributed a bit to the rise in oil prices. Meanwhile, the Federal Reserve, scheduled to announce its monetary policy on Wednesday, is widely expected to raise interest rate by 25 basis points. The European Central Bank and the Bank of Japan are scheduled to announce their interest rate decisions on Thursday and Friday, respectively. Benchmark crude oil futures for September delivery rose $0.89 or about 1.1 percent to settle at $79.63 a barrel on the New York Mercantile Exchange. Brent crude for September delivery surged $0.90 or about 1.08 percent to settle at $83.64 a barrel on London's Intercontinental Exchange.

Indian rupee ended weaker against the US dollar on Tuesday as elevated crude oil prices and a muted trend in domestic equities weighed on investor sentiments. The strengthening of the American currency in the overseas market further dented investor sentiments. Traders were cautious despite report that Foreign Portfolio Investors (FPIs) have pumped Rs 153,539 crore in India so far in 2023-24 as Indian equity markets continue to attract FPIs. On the global front, euro fell for a fifth successive session on Tuesday as evidence of a slowdown in Europe builds, the pound steadied, and China's yuan strengthened after the country's leaders pledged to step up policy support for the flailing economy. Finally, the rupee ended at 81.88 (Provisional), weaker by 7 paise from its previous close of 81.81 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 9703.51 crore against gross selling of Rs 9473.00 crore, while in the debt segment, the gross purchase was of Rs 391.57 crore with gross sales of Rs 228.18 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.60 crore against gross selling of Rs 13.81 crore.

The US markets ended higher on Tuesday as investors parsed a batch of corporate earnings from major technology names and geared up for Wednesday's interest rate policy decision. Asian markets are trading mixed on Wednesday as investors brace for the U.S. Federal Reserve's rate decision. Indian markets ended flat on Tuesday after exhibiting volatility in intra-day deals as investors remained nervous ahead of the US Fed's monetary policy decision. Today, domestic indices are likely to get positive start even though markets elsewhere in Asia are subdued this morning ahead of the US Fed's rate decision later tonight. Sentiments will get a boost as the International Monetary Fund (IMF) raised the FY24 economic growth forecast for India by 20 basis points to 6.1 per cent, citing the country's stronger-than-expected growth momentum in the March quarter of FY23. Some support will come with foreign fund inflows. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) bought shares worth Rs 1,088.76 crore on July 25. Traders may take note of minister of state for finance Pankaj Chaudhary's statement that India's general government debt moderated to 80.9% of the Gross Domestic Product (GDP) in 2022-23 from 83.3% in 2021-22. However, upside may remain limited amid rise in crude oil prices overnight coupled with monthly F&O expiry tomorrow. There will be some buzz in pharma stocks as credit rating agency ICRA projected steady growth for the Indian pharmaceutical industry, despite headwinds and regulatory challenges. According to its report, the revenues of ICRA's sample set of 25 Indian companies (which account for 60 per cent of the overall domestic pharma industry) are expected to grow by 7-9 per cent in FY24, following a YoY growth of 10 per cent in FY23. There will be some reaction in OMCs stocks as Crisil Ratings in a research report said that oil marketing companies (OMCs) may see operating profit rebound to Rs 1 trillion in the current financial year of 2023-24 (FY24), rising by more than three-times from FY23's low of Rs 33,000 crore. Meanwhile, Axis Bank, Bharat Petroleum Corporation, Cipla, Colgate-Palmolive (India), Deepak Fertilisers & Petrochemicals Corporation, Dr Reddy's, PNB, Shree Cement, Tech Mahindra, Bajaj Finance, Aditya Birla Sun Life AMC, TCPL and REC, among others to report their Q1 results later in the day.

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

Nifty Top volumes

• Tata Steel has reported 93.20% fall in consolidated net profit at Rs 524.85 crore for Q1FY24 as compared to Rs 7714.00 crore for the same quarter in the previous year.
• ITC has received in-principle approval from the Board for the demerger of Hotels Business under a scheme of arrangement. 
• Tata Motors has launched its second Registered Vehicle Scrapping Facility in Bhubaneswar, Odisha.
• Reliance Industries has entered into an agreement to invest alongside Brookfield Infrastructure and Digital Realty in their Indian SPVs set up for developing data centers in India.