Tuesday turned out to be a fabulous day of trade for the Indian equity benchmarks, with frontline gauges garnering gains of over two and half percent as buying interest was seen across all sectors. After the gap-up start, the benchmarks moved from strength to strength till the end and settled around the day's high. Traders also took some encouragement with a joint survey conducted by industry body FICCI and Indian Banks' Association revealing that the economic activity in India is in recovery mode as growth seen broad basing with most sectors operating at pre-pandemic levels. The uptick in growth was despite a muted start to this year due to emergence of Omicron variant. Some support also came in with Commerce and Industry Minister Piyush Goyal's statement that India is looking at getting duty-free access for different products identified under One District One Product (ODOP) initiative, to promote their exports . The Minister said that these products, which include gold jewellery, toys, handicrafts and handlooms, hold huge opportunities. Markets extended gains in last leg of trade which mainly helped markets to end near intraday high levels, as some support came with Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy's statement that Indian economy's size will touch $20 trillion by 2047 provided the annual average growth is 7-7.5 percent in the next 25 years. He also said the country's annual per capita income will be over $10,000 if the country grows at an average economic growth rate of 7-7.5 percent in the next 25 years. Some optimism also came as credit rating agency Icra in its a note based on the analysis of 620 listed companies, excluding financial sector entities, has said that India Inc saw a 39 per cent jump in top lines during April-June quarter. However, it said their operating margins declined 213 basis points to 17.7 per cent due to input cost inflation. Finally, the BSE Sensex rose 1564.45 points or 2.70% to 59,537.07 and the CNX Nifty was up by 446.40 points or 2.58% to 17,759.30.

The US markets ended in red on Wednesday on lingering concerns about higher interest rates following some hawkish comments from Federal Reserve officials. Cleveland Federal Reserve President Loretta Mester said she expects the Fed to raise interest rates above 4 percent by early next year. Mester also said she does not anticipate the Fed cutting interest rates in 2023, with the central bank likely to keep rates at an elevated level in an effort to combat inflation. On the economic data front, Payroll processor ADP released a report showing private sector employment in the U.S. increased by much less than expected in the month of August. ADP said private sector employment rose by 132,000 jobs in August after jumping by 268,000 jobs in July. Street had expected employment to surge by 288,000 jobs. ADP suspended its jobs report for June and July as the firm revamped its methodology and entered into a partnership with the Stanford Digital Economy Lab. A report released by MNI Indicators showed its reading on Chicago-area business activity was little changed in the month of August. MNI Indicators said its Chicago business barometer inched up to 52.2 in August from 52.1 in July, with a reading above 50 indicating growth. Street had expected the business barometer to edge down to 52.0. The slight uptick came after the Chicago business barometer dropped to its lowest level since August 2020 in the previous month. The modest increase by the headline index came as the production index jumped to 54.9 in August from 48.2 in July, while the new orders index climbed to 48.9 from 44.5. On the sectoral front, Airline stocks moved sharply lower over the course of the session, dragging the NYSE Arca Airline Index down by 2.3 percent to its lowest closing level in a month.   

Crude oil futures ended lower with cut of over two percent on Wednesday on investor worries about the ailing state of the global economy, the prospect of central bank interest rate hikes, and increased restrictions to curb Covid-19 in China. China's factory activity extended declines in August as new Covid infections, the worst heatwaves in decades and an embattled property sector weighed on production, suggesting the economy will struggle to sustain momentum. Meanwhile, a report showing record high inflation in the Eurozone also led to worries aggressive monetary policy tightening by the European Central Bank could trigger a recession. Benchmark crude oil futures for October delivery fell $2.09 or about 2.3 percent to settle at $89.55 a barrel on the New York Mercantile Exchange. Brent crude for November delivery dropped $2.70 or 2.76 percent to settle at $95.14 a barrel on London's Intercontinental Exchange.      

Indian rupee strengthened against the US dollar on Tuesday, on persistent selling of the American currency by exporters and banks. Besides, dollar's weakness against some other currencies overseas along with a firm trend in domestic equities supported the rupee sentiment. Traders took encouragement with Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy's statement that Indian economy's size will touch $20 trillion by 2047 provided the annual average growth is 7-7.5 percent in the next 25 years. He also said the country's annual per capita income will be over $10,000 if the country grows at an average economic growth rate of 7-7.5 percent in the next 25 years. On the global front, euro climbed past parity against a softening dollar on Tuesday, ahead of German inflation that will help indicate the likelihood of a super-sized European Central Bank rate hike. Finally, the rupee ended at 79.52 (Provisional), stronger by 39 paisa from its previous close of 79.91 on Monday.

The FIIs as per Tuesday's data were net buyers in equity, while net sellers in debt segment. In equity segment, the gross buying was of Rs 8084.96 crore against gross selling of Rs 6020.74 crore, while in the debt segment, the gross purchase was of Rs 421.89 crore against gross selling of Rs 1106.06 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.17 crore against gross selling of Rs 8.29 crore.

The US markets ended lower on Wednesday as worries about aggressive interest rate hikes from the Federal Reserve persist. Asian markets are trading mostly in red on Thursday following weak Wall Street cues. Indian markets ended higher by more than two and half per cent on Tuesday. The market remained closed on Wednesday on account of Ganesh Chaturthi holiday. Today, benchmarks are likely to make flat-to-negative start of new month amid weakness in global markets. The disappointing gross domestic product (GDP) numbers likely to weigh on investors' sentiment. India's gross domestic product (GDP) rose 13.5 per cent year-on-year in the April-June period. Though, it is the fastest annual expansion in a year, it was lower than the predictions made by the Reserve Bank of India (RBI; 16.2 per cent) and other market participants. Traders will be concerned as the data of the Department for Promotion of Industry and Internal Trade (DPIIT) showed that Foreign Direct Investment (FDI) equity inflows into India contracted by 6 per cent to USD 16.59 billion during the April-June quarter this fiscal. Some cautiousness will also came as the output of India's eight infrastructure industries decelerated to a six-month low of 4.5 per cent year-on-year (y-o-y) in July as compared to a double-digit growth in June. More pessimism will come as the Reserve Bank data showed that India Inc's foreign direct investment in July declined over 50 per cent to $1.11 billion in July 2022. As per the RBI data, on Outward Foreign Direct Investment (OFDI), the domestic companies had invested over $2.56 billion in July 2021 in the form of equity, loan and issuances of guarantees. Besides, India's fiscal deficit during the first four months of the ongoing financial year was at Rs 3.4 trillion or 20.5 per cent of the annual target. In April-July 2021, the Centre's fiscal deficit was Rs 3.2 trillion or 21.3 per cent of last year's target. However, some respite may come later in the day as Finance Secretary T V Somanathan said the government is confident that India's real gross domestic product (GDP) growth will exceed 7 per cent in 2022-23 (FY23). This will make it the world's fastest-growing major economy. Some support may also came as the Periodic Labour Force Survey (PLFS) results for April-June 2022 showed that the unemployment rate in urban areas fell for the fourth consecutive quarter. Meanwhile, in August, domestic equity markets garnered one of the highest foreign portfolio investor (FPI) flows since the outbreak of the pandemic in 2020, despite the US Federal Reserve standing firm on unwinding its stimulus measures to control inflation. FPIs pumped in over Rs 51,000 crore ($6.4 billion) in August, the most since December 2020. Auto industry stocks will be in focus reacting to their monthly sales numbers to be out later in the day. Besides, a private report stated that Medium and heavy commercial vehicle (M&HCV) makers were the worst impacted in the auto space in the June (Q1FY23) quarter due to a spike in raw material costs and moderating volumes. Stocks from oil & gas, aviation sectors will be in limelight as the government hiked the windfall profit tax on the export of diesel to Rs 13.5 per litre and that on jet fuel exports to Rs 9 per litre. The levy on domestically-produced crude oil too has been increased by Rs 300 per tonne to Rs 13,300.

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

Nifty Top volumes

• M&M's step-down Subsidiary -- Mahindra Solarize has incorporated subsidiary company namely Resurgence Solarize Urja in Mumbai, Maharashtra.
• ICICI Bank has partnered with National Payments Corporation of India to launch a range of credit cards on RuPay, the indigenous payments network.
• Axis Bank has come up with a wide array of offers for its customers of Kochi1 Card.
• Reliance Industries' telecom arm -- Reliance Jio Infocomm has partnered with Qualcomm to develop 5G solutions for India.