Indian equity benchmarks fell for second straight session on Tuesday dragged by losses in Metal, Telecom, Oil & Gas and Banking shares. After making cautious opening, key indices traded tad lower as S&P Global cut its growth forecasts for some of Asia's top economies including India, the Philippines and Malaysia, offsetting upgrades to China and South Africa and much of Latin America. The estimates, which feed into S&P's closely-followed sovereign ratings, saw India's growth projection chopped to 9.5% from 11% due to its COVID-19 outbreak. Selling further crept in with a domestic rating agency ICRA stating that nearly a third of loans by NBFCs are in risky segments, and the already elevated non-performing assets ratio for such lenders are expected to rise by up to 1 percent in FY22 due to the impact of the second COVID-19 wave. Markets added losses in late afternoon session, despite data showing that unemployment rate came down further to 8.72% for the week ended June 27 from 9.35% in the previous week, but still remained higher than 8.16% recorded at the beginning of the second Covid-19 wave in early April. The unemployment rate has fallen on a fallen labour participation rate (LPR). The LPR fell from 40.5% in the previous week to 39.6%. Traders failed to get support with Federation of Indian Exports Organisation (FIEO) stating that the little ambitious exports target of $400 billion for the current fiscal is achievable but it requires aggressive marketing strategy and venturing into new markets. FIEO President A Sakthivel also said that free trade agreements with countries including UK, Europe, Australia, and the US would help further push the country's exports. Traders also overlooked Niti Aayog Vice Chairman Rajiv Kumar's statement that the fresh set of stimulus measures announced by the finance minister will not only accelerate the revival of the economy but also enable a bolstering of employment opportunities. Finance Minister Nirmala Sitharaman on Monday announced Rs 1.5 lakh crore of additional credit for small and medium businesses, more funds for the healthcare sector, loans to tourism agencies and guides, and waiver of visa fee for foreign tourists as part of a fresh package to support the pandemic-hit economy. Finally, the BSE Sensex fell 185.93 points or 0.35% to 52,549.66, while the CNX Nifty was down by 66.25 points or 0.42% to 15,748.45.

The US markets ended marginally higher on Tuesday. The Nasdaq and the S&P 500 climbed fresh peak, and recorded new closing highs, while the Dow, which opened on a firm note, rebounding from losses in the previous session, ended with a small gain. Homebuilder stocks moved higher after S&P Case-Shiller said home prices rose more than 14% in April compared to the prior year. Five US cities, including Seattle, saw their largest annual increase on record. Semiconductor stocks gained strength later in the session, with Skyworks and Advanced Micro Devices climbing 4.5% and 2.8%, respectively. General Electric boosted the industrials sector, rising over 1% after Goldman Sachs named the stock a top idea. However, gains remained capped as investors turned cautious and largely refrained from holding positions at higher levels as they looked ahead to crucial jobs data, due later in the week. Uncertainty about the pace of global economic recovery due to a surge in the delta variant of Covid-19 and fresh curbs on travel in several countries, including Spain, Portugal and Germany, weighed on sentiment.

Crude oil futures ended slightly higher on Tuesday as broad hopes for a demand recovery persisted despite new outbreaks of the highly contagious Delta variant of the coronavirus prompting fresh mobility curbs worldwide. Meanwhile, traders looked ahead to the upcoming meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+). The OPEC+ meeting, scheduled to take place on Thursday (July 1), will likely see the members agreeing on increasing crude output by an additional 500,000 barrels a day from August amid hopes energy demand will pick up. Crude oil futures for August added $0.07 to settle at $72.98 barrel on the New York Mercantile Exchange. August Brent crude gained $0.37 or 0.5 percent to settle at $75.05 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against dollar on Tuesday as a muted trend in domestic equities and firm crude oil prices weighed on investor sentiment. Traders remained cautious as S&P Global cut its growth forecasts for some of Asia's top economies including India. The estimates, which feed into S&P's closely-followed sovereign ratings, saw India's growth projection chopped to 9.5% from 11% due to its COVID-19 outbreak. However, downside remained capped as Union Finance Minister Nirmala Sitharaman announced the much-awaited fiscal package to revive the economy ravaged by the second pandemic wave, keeping the fiscal outgo limited for the current year. On the global front, the dollar rose towards three-month highs versus major counterparts as coronavirus outbreaks threatened to snuff out global economic recovery with the Australian dollar and the British pound leading losses. Finally, the rupee ended 74.23, weaker by 4 paise from its previous close of 74.19 on Monday.

The FIIs as per Tuesday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 6360.58 crore against gross selling of Rs 7538.50 crore, while in the debt segment, the gross purchase was of Rs 371.13 crore against gross selling of Rs 412.13 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.12 crore against gross selling of Rs 3.29 crore.

The US markets ended higher on Tuesday lifted by technology stocks after an upbeat consumer confidence report. Asian markets are trading in green on Wednesday following overnight gains on wall street amid China is set to release its data on manufacturing activity. Indian markets ended lower on Tuesday with dragged mainly by banking and financial stocks. Meanwhile, losses in metals and auto sectors also weighed on the benchmarks. Today, the start of session is likely to be optimistic tracking gains in global markets. Traders will be taking encouragement with a private survey titled Smart Power India's (SPI's) Survey of Mini-grid Villages May 2021 which shows that overall economic activity in such villages was less affected in 2021 due to the pandemic that largely impacted the healthcare and educational sector. Some support will come as the Union Cabinet may soon clear a proposal to provide government guarantee to security receipts issued by the National Asset Reconstruction Company (NARCL) as part of resolution of bad loans. Indian Banks' Association (IBA), entrusted with the task of setting up a bad bank, has pegged the government guarantee to be around Rs 31,000 crore. Traders may take note of report that the latest credit push for the pandemic-hit sectors and other relief supports will have an additional 60 bps impact on the fiscal deficit, and can offer an additional liquidity window of Rs 70,000 crore to banks. However, there may be some cautiousness as a day after witnessing a sharp decline in the number of daily Covid-19 cases, India recorded 45,699 infections and 816 fatalities in the last 24 hours. The country's total coronavirus caseload stands at 30,316,000, while the death toll has jumped to 397,668. Meanwhile, the market regulator in its board meeting said appointment/re-appointment and removal of independent directors shall be through a special resolution of shareholders for all listed entities. Pharma stocks will be in focus as Pharma majors including Cipla, Dr Reddy's Laboratories, Sun Pharmaceutical Industries and Torrent Pharmaceuticals will collaborate for the clinical trial of the investigational oral anti-viral drug Molnupiravir for the treatment of mild COVID-19 in an outpatient setting in India. There will be some reaction in oil & gas sector stocks as oil minister Dharmendra Pradhan said India's fuel demand, hit by a deadly second wave of coronavirus, would recover to pre-pandemic levels by the end of this year. Banking stocks will be in limelight with a private report that helped by faster pace of credit growth, the share of Indian private banks in total credit rose to 36.5 per cent in the financial year ended March 2021 (FY21) from 35.4 per cent a year ago.

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

Nifty Top volumes

• Cipla has received approval from India's drug regulator DCGI to import Moderna's COVID-19 vaccine for restricted emergency use in the country. 
• Dr. Reddy's Laboratories has partnered with B Medical Systems. 
• UPL has launched NPP - a new global business unit housing UPL's comprehensive portfolio of natural and biologically derived agricultural inputs and technologies. 
• Tata Motors is planning to have 10 new BEVs in its domestic product portfolio by 2025 as it looks to drive its business model towards sustainable mobility going ahead.