Indian equity benchmarks ended higher on Wednesday, with both Sensex and Nifty closing higher by 351 and 97 points, respectively, led by gains in shares of select heavyweights including Reliance Industries, Larsen & Toubro and ITC. After making a positive start, key indices extended gains, as traders got encouragement after the International Monetary Fund (IMF) in its latest update of the World Economic Outlook (WEO) revised upward India's growth rate projection by 0.2 percentage point to 6.1 per cent for 2023, from earlier projection in April. It said this is reflective of the momentum from stronger-than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment. Some optimism also came with provisional NSE data showing that foreign institutional investors (FIIs) bought Rs 1,089 crore of Indian equities on a net basis during the previous session, while domestic investors sold Rs 334 crore of shares. Sentiments remained up-beat in afternoon deals, as traders took solace with 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. The general government debt, which comprises the debts of the centre and states, had soared to 87.8% in FY21, the highest in at least four decades, as government expenditure rose during the Covid-19 pandemic, amid revenue slump. However, markets trimmed some gains in late afternoon deals, as global cues were weak ahead of the US Fed interest decision later today. Meanwhile, Reserve Bank of India (RBI) Deputy Governor M Rajeshwar Rao said the Reserve Bank of India will soon issue guidance to banks for the identification of risks to their credit portfolio from climate-related issues. Finally, the BSE Sensex rose 351.49 points or 0.53% to 66,707.20 and the CNX Nifty was up by 97.70 points or 0.50% to 19,778.30.

The US markets ended mostly lower on Wednesday after the Fed announced its widely expected decision to resume raising interest following a pause last month. The Fed said that it has decided to raise the target range for the federal funds rate by 25 basis points to 5.25 to 5.50 percent. With the increase, the midpoint of the target range is the highest since early 2001. The decision to increase rates came as the Fed noted inflation remains elevated, while U.S. economic activity has been expanding at a moderate pace and job gains have been robust in recent months. Fed Chair Jerome Powell said it is possible the central bank could raise rates again in September or hold steady, noting the central bank plans to take a meeting by meeting approach. Powell said We're going to be going meeting by meeting and as we go into each meeting, we're going to be asking ourselves the same questions. He added So we haven't made any decisions about any future meetings, including the pace at which we consider hiking, but we're going to be assessing the need for further tightening that may be appropriate. At the same time, the Fed Chief said the central bank can afford to be a little patient as they assess incoming economic data. On the economic data front, despite the lackluster close by the broader markets, software stocks saw substantial weakness on the day, dragging the Dow Jones U.S. Software Index down by 2.6 percent. Software giant Microsoft (MSFT) led the way lower, plunging by 3.7 percent after reporting better than expected fiscal fourth quarter results but providing disappointing revenue guidance for the current quarter.

Crude oil futures ended lower on Wednesday as data showed a much smaller than expected drop in U.S. crude inventories in the week ended July 21st. Data released by the Energy Information Administration (EIA) showed crude inventories in the U.S. dropped by 600,000 barrels last week, substantially less than an expected draw of 2.35 million barrels. The EIA data also showed that gasoline stockpiles dropped 0.786 million barrels last week versus an expected decline of 1.678 million barrels, while distillate stockpiles dropped 0.245 million barrels, less than an expected decline of 0.301 million barrels. Besides, uncertainty about the outlook for demand from China and the Federal Reserve's decision to raise rates by 25 basis points also hurt oil prices. Benchmark crude oil futures for September delivery fell $0.85 or about 1.1 percent to settle at $78.78 a barrel on the New York Mercantile Exchange. Brent crude for September delivery dropped $0.72 or about 0.9 percent to settle at $82.92 a barrel on London's Intercontinental Exchange.

Indian rupee weakened against the US dollar on Wednesday due to an elevated crude prices in international markets and month-end dollar demand from importers. Investors overlooked report that 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. On the global front, Russian rouble steadied against the dollar on Wednesday, propped up by high oil prices and an upcoming, favourable tax period ahead of two OFZ bond auctions by the finance ministry. Finally, the rupee ended at 82.01 (Provisional), weaker by 13 paise from its previous close of 81.88 on Tuesday.

The FIIs as per Wednesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 11992.96 crore against gross selling of Rs 9138.16 crore, while in the debt segment, the gross purchase was of Rs 231.89 crore with gross sales of Rs 192.76 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.93 crore against gross selling of Rs 9.85 crore.

The US markets ended mostly in red on Wednesday as the Fed left the door open for further tightening till their target inflation (2 per cent). Asian markets are trading mostly in green on Thursday though overall gains remained limited ahead of the ECB and BOJ policy meetings. Indian markets ended Wednesday's session higher despite weak cues from global markets. Today, markets are likely to start session on positive note tracking gains in Asian counterparts. Foreign fund inflows likely to support markets. According to the provisional data available on the NSE, foreign institutional investors (FII) bought shares worth net Rs 922.84 crore on July26. Traders may take note of Prime Minister (PM) Narendra Modi's statement that India would be among the top three economies in the world in his third term, the leitmotif of which would be to achieve rapid progress, eradicate poverty, and transform India into a developed and prosperous nation within the next 25 years. However, some volatility may creep in the markets ahead of monthly F&O expiry later in the day. Investors will be looking ahead to the Goods and Services Tax Council meeting to be held of August 02. The agenda is expected to include a final decision on the proposed 28 per cent GST on online gaming, casinos and horse racing. Meanwhile, the International Monetary Fund has said it would encourage India to remove restrictions on export of a certain category of rice, which, it said, would have an impact on global inflation. Banking stocks will be in focus with a private report that private sector banks reported a robust 37.0 per cent year-on-year (YOY) growth in net profit to Rs 37,683 crore in the first quarter ended June 2023 on healthy growth in net interest income (NII) and strong credit offtake. IT stocks will be in limelight after Tech Mahindra reported disappointing Q1 numbers. Market participants will continue to focus on the April-June (Q1FY24) quarter results of fiscal year 2023-24. On Thursday, July 27, companies like Bajaj Finserv, Nestle India, ACC, Indian Hotels, Shriram Finance, Bharat Electronics, are some of the prominent names to report Q1FY24 scorecard.

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

Nifty Top volumes

• Tata Motors has introduced exciting consumer offers for its passenger vehicle portfolio in the lead up to the auspicious Onam festival. 
• HCL Technologies has launched its Global Delivery Center in Rabat, Morocco, to drive transformation projects to clients across portfolio themes of digital, engineering, cloud, AI and software. 
• Cipla has reported 41.34% rise in its consolidated net profit at Rs 998.07 crore for Q1FY24 as compared to Rs 706.14 crore for the same quarter in the previous year.
• SBI Life Insurance Company has reported 44.96% rise in its net profit at Rs 381.04 crore for Q1FY24 as compared to Rs 262.85 crore for the same quarter in the previous year.