Indian equity benchmarks experienced significant volatility throughout the day but finally ended with gains on Wednesday led by index heavyweights Indusind Bank, Power Grid Corporation and Bajaj Finance. Markets made a positive start but soon wiped out gains and traded with negative bias, as traders restrained from taking any long position ahead of upcoming macro-economic data. Some concern came as Automobile dealers' body the Federation of Automobile Dealers Associations (FADA) raised the issue of unauthorised multi-brand outlets (MBOs) in the two-wheeler industry, which are not certified as bona fide dealers and sell unregistered vehicles without any trade certificates or after-sales services. This has caused many legitimate two-wheeler dealerships to shut down, making their businesses unviable. Despite volatility in afternoon, key gauges remained positive for the most part of the session, taking support from a report that the free trade agreement between India and the UAE has transformed the partnership between the two countries by promoting two-way commerce at a healthy rate. Sentiments were positive, amid a report by industry body FISME stating that steps such as increasing awareness, easier documentation, simplified customs processes and standard operating practice for product returns would help in promoting the country's exports through e-commerce medium. Markets added some gains in late afternoon deals, as traders found some solace with a private report that India's consumer inflation likely cooled to an 18-month low in April as rises in food and fuel prices moderated, keeping it below the Reserve Bank of India's upper tolerance limit for the second consecutive month. Finally, the BSE Sensex rose 178.87 points or 0.29% to 61,940.20 and the CNX Nifty was up by 49.15 points or 0.27% to 18,315.10.  

The US markets ended mostly in green on Wednesday amid a positive reaction to the Labor Department's highly anticipated report on consumer price inflation in the month of April. The Labor Department said its consumer price index climbed by 0.4 percent in April after inching up by 0.1 percent in March. Street had expected consumer prices to rise by 0.4 percent. Excluding food and energy prices, core consumer prices also rose by 0.4 percent in April, matching the increase seen in March as well as street estimates. The report also showed the annual rate of consumer price growth edged down to 4.9 percent in April from 5.0 percent in March. Street had expected the year-over-year growth to be unchanged. The annual rate of core consumer price growth also slipped to 5.5 percent in April from 5.6 percent in March. The modest slowdown matched street estimates. With the annual consumer price growth marking the smallest 12-month increase since April 2021, the data added to optimism about the Federal Reserve pausing its interest rate hikes. CME Group's FedWatch Tool is currently indicating a 99.1 percent chance the Federal Reserve will leave interest rates unchanged at its next meeting in June. Buying interest was somewhat subdued, however, as traders worry the slowdown in the pace of price growth is partly due to the U.S. heading for a recession. On the sectoral front, Software stocks turned in a strong performance on the day, resulting in a 1.7 percent jump by the Dow Jones U.S. Software Index. With the gain, the index reached its best closing level in over a year. Semiconductor and biotechnology stocks also saw notable strength, contributing to the advance by the tech-heavy Nasdaq. On the other hand, steel stocks saw considerable weakness amid concerns about global demand, dragging the NYSE Arca Steel Index down by 1.4 percent. Oil service stocks also moved to the downside, with a steep drop by the price of oil weighing on the sector following the release of a report showing an unexpected weekly increase in U.S. crude oil inventories.

Crude oil futures ended significantly lower on Wednesday following the release of a report from the Energy Information Administration showing an unexpected increase in U.S. crude oil inventories in the week ended May 5th. The report said crude oil inventories climbed by 3.0 million barrels after falling by 1.3 million barrels in the previous week. Economists had expected inventories to dip by 0.9 million barrels. Meanwhile, the EIA said gasoline inventories declined by 3.2 million barrels for the week, while distillate fuel inventories tumbled by 4.2 million barrels. Benchmark crude oil futures for June delivery fell $1.15 or 1.6 percent to settle at $72.56 a barrel on the New York Mercantile Exchange. Brent crude for July delivery declined $1.03 or 1.3 percent to settle at $76.41 a barrel on London's Intercontinental Exchange.

Indian Rupee ended higher against the US dollar on Wednesday tracking the weakness of the American currency in the overseas market. Significant foreign fund inflows and easing crude oil prices also supported the Rupee. Traders took support with a private report that India's consumer inflation likely cooled to an 18-month low in April as rises in food and fuel prices moderated, keeping it below the Reserve Bank of India's upper tolerance limit for the second consecutive month. On the global front, dollar seesawed on Wednesday after U.S. President Joe Biden and top lawmakers made no headway in the debt ceiling crisis, although volatility was minimal ahead of inflation data that could be instrumental in determining where interest rates head. Finally, the rupee ended at 82.00 (Provisional), stronger by 6 paise from its previous close of 82.06 on Tuesday.

The FIIs as per Wednesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 9387.85 crore against gross selling of Rs 7387.07 crore, while in the debt segment, the gross purchase was of Rs 385.83 crore against gross selling of Rs 1328.67 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.84 crore against gross selling of Rs 22.00 crore.

The US markets ended mostly in green on Wednesday as data showed consumer inflation fell below 5 percent for the first time in two years. Asian markets are trading mostly in red on Thursday amid data showing China's consumer price inflation eased further in April and producer prices remained in deflation. Indian markets recovered from an early slide and ended modestly higher on Wednesday following last-hour gains. Today, start of the session is likely to be in green with marginal gains taking lead from mostly positive cues from the US markets overnight. Foreign fund inflows likely to aid domestic sentiments. On Wednesday, Foreign Institutional Investors (FIIs) bought 1833.13 crore in equity segment. Some support will come as Industry body PHDCCI said enhanced competitiveness of the Indian economy will attract more investments and create new employment opportunities for the growing young population in the country. Traders may take note of report that Union MSME minister Narayan Rane has urged the global and domestic industries to continue to invest in India, which is on its path to become the third largest economy. Besides, Comptroller & Auditor General of India (CAG) Girish Chandra Murmu has emphasised that India's resources have to be efficiently utilised for the country to become a fully developed nation. Meanwhile, the government has extended the deadline to May 31 for Goods Transport Agencies to exercise the option of paying GST on forward charge basis for current fiscal. Under GST, Goods Transport Agencies have the option to collect and pay GST on forward charge basis. If they do not opt to do so, the liability to pay the tax gets transferred to the recipient of the service, under reverse charge mechanism. Agriculture related stocks will be in focus with report that wheat procurement by the Food Corporation of India (FCI) and state government agencies for the current season has crossed 25.2 million tonne (MT) so far, up by 30% on year. there will be some reaction in sugar industry stocks with a private report that sugar production in the 2022-23 season that started from October is now expected to be around 9 per cent less than last season due to a drop in recovery and cane output particularly in Maharashtra, which is one of the biggest growing states. Investors await more of financial results from India Inc for domestic cues, with Asian Paints, Eicher Motors, Deepak Nitrite, GSPL, Siemens and Dr Lal Pathlabs due to post their earnings later in the day.

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

Nifty Top volumes

• Axis Bank has successfully enabled RuPay Credit Card support on UPI.
• Hero MotoCorp's Vida brand has set a new Guinness World Records Title, providing yet another fillip to the electric vehicle industry.
• Bharti Airtel has crossed the 2 million unique 5G user mark on its network in Andhra Pradesh and Telangana.
• JSW Steel has reported the crude steel production for the month of April, 2023 at 17.77 lakh tonnes, that grew by 7% as against 16.67 lakh tonnes in April 2022 on standalone basis.