Indian equity benchmarks ended higher on Wednesday boosted by Realty, IT and TECK stocks as continued fall in domestic COVID-19 cases improved investor risk appetite. The benchmarks opened on a subdued note but surged in mid-morning deals, as sentiments got some encouragement with Industry chamber -- Confederation of Indian Industry (CII) stating that healthy flow of foreign direct investments (FDI) into the country corroborates India's status as a preferred investment destination among global investors. FDI into the country grew 19 per cent to $59.64 billion during 2020-21. Some optimism also came as the government begun assessing the impact of the second wave of infections on different sectors and may look at providing support at an appropriate time to segments requiring fiscal help, with the world's worst outbreak of COVID pandemic stalling a nascent economic recovery. Besides, the Centre advised states and UTs to plan for scaling up vaccination coverage through available stocks and anticipated supplies till the end of June, while private hospitals were advised not to allow offline vaccine registration as all registrations should be online. Domestic equities remained upbeat in late afternoon deals, as private report stated that India's economy is likely to have grown 0.6-2.1 per cent in the fourth quarter of the fiscal year 2020-21 (Q4FY21), better than the government's prediction of a contraction. However, for the entire FY21, they see gross domestic product (GDP) contracting 7-8 per cent. The growth in Q4 is led by widespread recovery in volumes and also low base effect, while the full-year contraction is mainly on account of a lockdown last year, which shut the economy for months. Meanwhile, Apparel Export Promotion Council (AEPC) has urged the government to declare apparel exports as essential services and exempt the exporting units from lockdowns across India. Finally, the BSE Sensex rose 379.99 points or 0.75% to 51,017.52, while the CNX Nifty was up by 93.00 points or 0.61% to 15,301.45.

The US markets ended higher on Wednesday as shares tied to the economic reopening supported markets. The optimism on the economy came as US average daily Covid cases fall below 25,000 and as nearly half the US population has received at least one vaccination dose. Meanwhile, Bitcoin continued its comeback, helping risk sentiment in the financial markets. Bitcoin ended Wednesday at about $38,500. On May 19, the cryptocurrency hit a low of $30,001.51 following an intraday crash of 30%. Shares of Tesla, a big holder of bitcoin, added 2.4%. Besides, investors kept an eye on Washington and any developments on an infrastructure compromise that could boost the economy further. Senate Republicans plan to send President Joe Biden a counteroffer this week that costs nearly $1 trillion. On the sectoral front, reflecting optimism about the economy reopening, airline stocks showed a strong move to the upside, driving the NYSE Arca Airline Index up by 3 percent. Housing stocks also turned in a strong performance, resulting in a 1.6 percent advance by the Philadelphia Housing Sector Index. Luxury homebuilder Toll Brothers (TOL) posted a standout gain after reporting better than expected fiscal second quarter results. Computer hardware, steel and brokerage stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Crude oil futures ended higher for fourth straight session on Wednesday after data showed a drop in US crude inventories in the week ended May 21. Data released by Energy Information Administration (EIA) showed crude oil inventories in the US dropped by 1.662 million barrels last week, bigger than an expected draw of about 1.05 million barrels. EIA also showed gasoline inventories were down by 1.745 million barrels, and distillate stockpiles declined by 3.013 million barrels in the week. The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 439,000 barrels for the week ended May 21. Crude oil futures for July gained 14 cents or 0.2 to settle at $66.21 barrel on the New York Mercantile Exchange. July Brent crude rose 16 cents or 0.3 percent to settle at 68.87 a barrel on London's Intercontinental Exchange.

Indian Money market remained closed on Wednesday on account of Buddha Purnima.

The FIIs as per Tuesday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 8252.42 crore against gross selling of Rs 7129.45 crore, while in the debt segment, the gross purchase was of Rs 321.14 crore against gross selling of Rs 442.93 crore. Besides, in the hybrid segment, the gross buying was of Rs 66.51 crore against gross selling of Rs 78.48 crore.

The US markets ended higher on Wednesday with modest gains as recent comments from Federal Reserve officials helped tamp down concerns about runaway inflation and kept bond yields in check. Asian markets are trading mixed on Thursday as investors look ahead to the release of Chinese industrial profits data for April. Indian markets ended near-record closing highs on Wednesday boosted by IT and financial stocks as gains in Asian peers and continued decline in domestic COVID-19 cases also lifted the sentiment. Today, the markets are likely to make flat-to-positive start on F&O expiry day tracking overnight gains on Wall Street amid muted trend in Asian peers. There will be some volatility in the markets ahead of the expiry of May series derivative contracts later in the day. There will be some cautiousness as rating agency Crisil in its research report said higher input prices and disruptions to the rural economy have resulted in price pressures and inflation is back to haunt us. The report by Crisil said it sees upside risks to its 5 per cent estimate on consumer price inflation in FY21 because of this. also, a private report stated that India's economic activity showed signs of beginning to cool off in April as several states resorted to lockdowns to control a deadly second wave of the coronavirus. Besides, India recorded over 211,000 new Covid infections, while deaths from the disease rose by 3,842. The country's total cases now stand at 27.36 million. However, some support may come with private report that the government may at the beginning of the unlock phase announce another stimulus package for the most hit sectors such as small business and self-employed, with the world's worst pandemic outbreak scarring nascent economic recovery. Meanwhile, External Affairs Minister S Jaishankar said India-US ties are one of the major relationships in the world and the challenge before New Delhi and Washington is how to translate their fundamental, societal and geopolitical convergences into actionable policies. Sugar stocks will be in focus with a private report that Indian sugar mills have started selling sugar without the support of government subsidies, which could lift exports by 14% from a year ago to a record 6.5 million tonnes in 2020/21. There will be some reaction in two and three wheeler industry stocks as ratings agency ICRA said the electric two and three-wheelers volume are expected to account for 8-10 per cent and 30 per cent of new vehicle sales in the country by 2025, respectively, owing to low operating cost and attractive subsidy support, among others. Hotel industry stocks will be in limelight as the Hotel Association of India (HAI), the apex body for hotels, has appealed to Prime Minister Shri Narendra Modi for immediate intervention to provide relief to the hospitality industry which is on the verge of collapse.

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

Nifty Top volumes

• HDFC is planning to raise up to Rs 7,000 crore by issuing bonds on private placement basis. 
• Coal India's coal allocation under special forward e-auction for the power sector dropped 27.9 per cent to 2.19 MT in April 2021. 
• Bajaj Finserv's EMI Store is offering no cost EMI deals across a wide range of Sony LED TVs.
• Eicher Motors' motorcycle arm -- Royal Enfield is reportedly going to shut its three south Indian manufacturing plants for three days to ensure safety amid rising COVID-19 cases.