Indian equity benchmarks recouped losses to end flat for second straight day on Wednesday, amid a mixed trend in global markets. For most part of the day, benchmarks traded with a negative bias, as traders were concerned with report that the second Covid wave has led to a sudden spike in India's unemployment rate - it rose to 11.9% in May from 7.97% in the previous month. The rate had last reached double digits in June last year, when it was 10.18%. According to the Centre for Monitoring Indian Economy (CMIE) data, barring April, May and June last year, the monthly unemployment had never breached the double-digit mark at least since January, 2016. Sentiments remained subdued with Moody's Investors Service pegged India's GDP growth at 9.3 percent in the current fiscal ending March 2022 and 7.9 percent in FY23. The re-imposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity, it said, adding that it does not expect the impact to be as severe as during the first wave. Some concerns also came amid report stating that India reported 133,228 fresh Covid-19 infections, taking the caseload to 28,306,883. With 3,205 new fatalities, the death toll is now at 335,114, Worldometer showed. India continues to be the second worst-hit nation. However, fag-end buying in power, energy and auto stocks helped domestic benchmark indices erase most of the day's losses. Traders took some support after India's exports grew by 67.39 per cent to $32.21 billion in May driven by healthy growth in sectors such as engineering, pharmaceuticals, petroleum products and chemicals. Exports in May last year stood at $19.24 billion and in May 2019 it was at $29.85 billion. Meanwhile, underlining the importance of the agriculture, the Minister of Agriculture and Farmers Welfare Narendra Singh Tomar has said that the dream of a self-reliant and digital India will only be realized by taking along the agriculture sector. Finally, the BSE Sensex fell 85.40 points or 0.16% to 51,849.48, while the CNX Nifty was up by 1.35 points or 0.01% to 15,576.20.

The US markets ended marginally higher on Wednesday with the S&P 500 hovering near an all-time high. The strength on Wall Street partly reflected continued optimism about the outlook for the global economy following Tuesday's upbeat manufacturing data. However, trading activity remained relatively light as traders seemed wary of making significant moves amid lingering concerns about inflation. Traders largely shrugged off the Federal Reserve's Beige Book, which said the US economy increased at a somewhat faster rate from early April to late May due in part to the positive effects of increased Covid-19 vaccination rates and relaxed social distancing measures. The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, still described the pace of economic growth as moderate. The Fed said the effects of expanded vaccination rates were most notable in consumer spending, as increased leisure travel and restaurant spending augmented ongoing strength in other spending categories. On the sectoral front, Oil service stocks once again outperformed driving the Philadelphia Oil Service Index up by 7.2 percent to its best closing level in over a year. The continued strength among oil service stocks came as the price of crude oil saw further upside, with crude for July delivery jumping $1.11 to a new more than two-year closing high of $68.83 a barrel. On the other hand, housing stocks showed a substantial move to the downside, dragging the Philadelphia Housing Sector Index down by 2 percent.

Crude oil futures ended higher for 2nd straight day on Wednesday amid rising hopes about a pick up in energy demand. Reports that there will be a delay in supply from Iran due to the slow pace of talks over the nuclear deal issue also contributed to the jump in oil prices. Talks between Iran and world powers with regard to revival of a 2015 nuclear deal are likely to be finalized in August. Meanwhile, after a meeting on Tuesday, the Organization of the Petroleum Exporting Countries and its allies agreed to gradually ease supply curbs through July. Comments from Saudi Energy Minister Prince Abdulaziz bin Salman that he expects oil demand in the US and China to see a significant recovery and the acceleration in vaccine rollouts will likely lead to a further rebalancing of the global oil market, further supported oil prices. Crude oil futures for July surged $1.11 or 1.6 percent to settle at $68.83 barrel on the New York Mercantile Exchange. August Brent crude rose $1.06 or 1.51 percent to settle at 71.31 a barrel on London's Intercontinental Exchange.

Indian rupee ended considerably weaker against the US dollar on Wednesday on increased demand for the greenback from importers and banks. This was the third consecutive session when the rupee was traded lower against dollar. Sentiments were fragile with reports that even though the cost of funds for the Centre has been trending down following the deft yield management by the Reserve Bank, for the hapless states, whose finances are crippled by the continuing lockdowns, it has been heading north and so far this fiscal as the average interest rate on their market borrowings has jumped 30 bps to 6.86 per cent. On the global front, pound was little changed on Wednesday as investors weighed the possibility that a COVID variant, first found in India, could delay the final phase of reopening in Britain on June 21. Finally, the rupee ended 73.09, weaker by 19 paise from its previous close of 72.90 on Tuesday.

The FIIs as per Wednesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 5397.94 crore against gross selling of Rs 4873.92 crore, while in the debt segment, the gross purchase was of Rs 1177.45 crore with gross sales of Rs 757.88 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.96 crore against gross selling of Rs 27.12 crore.

The US markets ended higher on Wednesday ahead of key US economic data due later in the week as investors weighed inflation concerns and a fresh surge in so-called meme stocks. Asian markets are trading mostly in green on Thursday boosted by optimism over the nation's vaccine rollout. Indian markets ended flat on Wednesday as losses in IT, FMCG and financial stocks were capped by gains in auto, metals and pharma sectors. Today, the markets are likely to make optimistic start following mostly positive cues from global markets. Investors will be eyeing the services PMI data to be out later in the day. Market participants will be optimistic ahead of the RBI monetary policy due tomorrow. In the policy, RBI is expected to maintain status quo and focus on economic growth while keeping an eye on the inflationary pressure due to rising commodity prices. Fall in coronavirus cases may also aid the sentiments in markets. Fresh infections continued to fall as it has been seven days since cases have not breached 200,000-mark. India reported 134,105 fresh Covid-19 infections today, taking the caseload to 28,440,988. Also, India has achieved a significant milestone as the cumulative Covid-19 vaccination coverage has crossed the 22 crore-mark, according to the 7 pm provisional report, the Union health ministry said on Wednesday. Some support will come as Minister of State for Finance Anurag Thakur said the Indian economy is resilient, and will rebound based on reforms that have ensured strong fundamentals. Thakur said reforms undertaken by the government, and strong fundamentals have ensured India is witnessing a swift rebound from a contraction of 24.4 per cent in April-June 2020 to a growth of 1.6 per cent in the January-March 2021. Traders may take note of report that Industry chamber Assocham recommended the government to extend relief measures such as regulatory easing, wage support, and interest subsidy for the MSMEs which are reeling under the severe impact of COVID-19. As the states are in the process of easing lockdowns, it said the trade and industry would need all-around support to pick up their business thread again. Banking stocks will be in focus as Standard and Poor (S&P) stated that the second Covid wave may push credit costs of the Indian banking system to 2.4 per cent by March 2022, compared to base case of 2.2 per cent. Sugar stocks will be in limelight after the government brought forward the target date for achieving 20 per cent ethanol-blending with petrol by two years to 2023 to help reduce India's dependence on costly oil imports.

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

Nifty Top volumes

• APSEZ has handled cargo volume of 25.65 MMT in May 2021, thus registering a growth of 79% on Year-on-Year basis. 
• Coal India's coal offtake rose by 38 per cent to 55 MT in May on the back of revival of fuel demand from the power sector. 
• Infosys is going to initiate an internal investigation into an insider trading matter after markets regulator Sebi barred two of its employees from the securities market in the case.
• SBI is going to auction two NPA accounts later this month for recovery of dues worth Rs 409.45 crore from the companies -- Kamachi Industries and Tantia Agrochemicals.