Indian equity benchmarks recouped their early losses to settle at fresh record closing high levels in volatile trade on Wednesday, amid buying in Banking, TECK and IT shares, and gains in European markets. Markets opened on a weak note and witnessed a sharp decline during the first half as traders remained cautious with Icra's report stating that amid continuing lower supplies, the borrowing cost for states fell to a 32-week low of 7.40 per cent Tuesday, down by 4 bps from the previous week's auctions. Throughout January, the interest rates were hovering at a two-year high of close to 7.9 per cent. Traders overlooked provisional data from the NSE showing that foreign institutional investors (FIIs) net bought shares worth Rs 574.28 crore on March 5, 2024. However, key indices staged a sharp recovery in the second half and closed with strong gains as traders found support with buying interest in the banking stocks amid CareEdge Ratings' report that bad loans of banks in India have reached record lows due to recoveries from defaulters and regularisation of payments many-fold. Some support also came as Crisil Ratings projected India's GDP growth at 6.8 per cent in the next fiscal and said the country will become an upper middle-income nation by 2031 with the economy doubling to $7 trillion. Crisil said the Indian economy will take support from domestic structural reforms and cyclical levers and can retain -- perhaps even improve -- its growth prospects to become the third largest economy by 2031. Traders also took a note of the Ministry of Agriculture & Farmers Welfare's latest report stating that the enrolment under the Pradhan Mantri Fasal Bima Yojana (PMFBY) increased by 27% in current year so far. Also, it said that 42% of total farmers insured under the scheme in FY 2023-24 are non-loanee farmers. Finally, the BSE Sensex rose 408.86 points or 0.55% to 74,085.99 and the CNX Nifty was up by 117.75 points or 0.53% to 22,474.05.

The US markets ended higher on Wednesday. The rebound on markets reflected a positive reaction to congressional testimony by Federal Reserve Chair Jerome Powell. Powell told the House Financial Services Committee it will likely be appropriate for the Fed to begin lowering interest rates at some point this year, although he reiterated officials need greater confidence inflation is moving sustainably toward 2 percent. The Fed Chief described the economic outlook as uncertain and said progress towards the Fed's 2 percent inflation objective is not assured. Powell said future interest rate decisions will be based on careful assessment of the incoming data, the evolving outlook, and the balance of risks. On the economic data front, a report released by payroll processor ADP showed private sector employment in the U.S. increased by slightly less than expected in the month of February. ADP said private sector employment rose by 140,000 jobs in February after climbing by an upwardly revised 111,000 jobs in January. Street had expected private sector employment to grow by 150,000 jobs compared to the addition of 107,000 jobs originally reported for the previous month. On the sectoral front, Semiconductor stocks turned in a strong performance on the day, with the Philadelphia Semiconductor Index surging by 2.4 percent to a record closing high. Considerable strength was also visible among computer hardware stocks, as reflected by the 1.8 percent jump by the NYSE Arca Computer Hardware Index. The index also reached a record closing high.

Crude oil futures ended higher on Wednesday after data from U.S. Energy Information Administration (EIA) showed large declines in gasoline and distillate stockpiles in the week ended March 2nd. Data from EIA showed gasoline stocks dropped by 4.5 million barrels last week, nearly three times the expected decline of 1.6 million barrels, while distillate stockpiles were down 4.1 million barrels in the week, substantially larger than an expected decline of 665,000 barrels. However, data from EIA showed crude oil stockpiles rose by 1.4 million barrels last week, less than an expected increase of 2.1 million barrels. Benchmark crude oil futures for April delivery rose $0.98 or about 1.25% to settle at $79.13 a barrel on the New York Mercantile Exchange. Brent crude for May delivery was up by $0.92 or about 1.12% to $82.96 per barrel on London's Intercontinental Exchange.

Indian rupee ended higher against the dollar on Wednesday buoyed by a weak American currency against major rivals overseas and a rally in domestic equities. Investors got support as Crisil Ratings projected India's GDP growth at 6.8 per cent in the next fiscal and said the country will become an upper middle-income nation by 2031 with the economy doubling to $7 trillion. Crisil said the Indian economy will take support from domestic structural reforms and cyclical levers and can retain -- perhaps even improve -- its growth prospects to become the third largest economy by 2031. On the global front, U.S. dollar was largely steady on Wednesday, as traders avoided making large bets ahead of congressional testimony from Federal Reserve Chair Jerome Powell, as well as the European Central Bank rate decision and U.S. jobs data later this week. Finally, the rupee ended at 82.85 (Provisional), stronger by 5 paise from its previous close of 82.90 on Tuesday.

The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 14304.65 crore against gross selling of Rs 14526.00 crore, while in the debt segment, the gross purchase was of Rs 1952.09 crore with gross sales of Rs 1154.75 crore. Besides, in the hybrid segment, the gross buying was of Rs 74.62 crore against gross selling of Rs 35.87 crore.

The US markets ended higher on Wednesday after US Fed Chief Jerome Powell's reiteration that interest rate cuts will begin this year but not immediately. Asian markets are trading mixed on Thursday with investors awaiting trade data from Australia and China. Indian markets staged a smart recovery in the last hour of trade, helping these indices hit fresh record highs, amid a sharp swing in banking and financial shares. Today, markets are likely to extend previous session's record run with gap-up opening tracking firm cues from Wall Street overnight. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 2,766.75 crore on March 6, provisional data from the NSE showed. Traders will be taking encouragement as RBI Governor Shaktikanta Das said the economic growth in the current financial year could be close to 8 per cent in view of the third quarter GDP data released by the government. Governor Das said that overall the economy is doing very well, citing improvement in fiscal consolidation, current account deficit and price situation. Also, Acuite Ratings & Research in a report said the optimism on the domestic economy seems to be improving by the month with NSO revising its GDP growth estimate to 7.6 per cent for FY24 and pegging Q3 growth at 8.4 per cent, RBI's economic growth forecast at 7.0 per cent in FY25, headline inflation subsiding to around 5.0 per cent, core inflation dropping below 4.0 per cent. However, there may be some volatility in the markets ahead of long weekend holiday as markets will remain close on Friday on account of Mahashivratri. Some cautiousness may come as Department for Promotion of Industry and Internal Trade data showed that foreign direct equity (FDI) investments contracted by 21 per cent Y-o-Y to $41.31 billion during the calendar year 2023. The sustained contraction in investment inflows comes against the backdrop of uncertainties and challenges in the global economy. This includes factors such as high inflation and slowdown in developed countries. FMCG sector stocks will be in focus with a private report that the Indian fast-moving consumer goods (FMCG) sector is expected to see subdued growth up until the September quarter of the ongoing calendar year. Clearly continuing weakness in demand -- not just in rural parts but also in urban areas -- is taking a toll. There will be some reaction in healthcare industry stocks with a private report that healthcare innovation in India, currently valued at $30 billion, is expected to double by FY28. It added pegged at $180 billion in FY23, India's overall healthcare market is projected to grow at a compound annual growth rate (CAGR) of 12 per cent to $320 billion by the same time. Meanwhile, Mukka Proteins is set to make its stock market debut on Thursday at an issue price of Rs 28 per share.

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

Nifty Top volumes

• Infosys has renewed its digital innovation partnership with the ATP Tour until 2026.
• ONGC has received an approval for investment of additional equity of Rs 99 crore in ONGC Green.
• LTIMindtree has executed a SHA with Global Digital for setting up a Joint Venture in the Kingdom of Saudi Arabia.
• Wipro, Magna and General Motors have teamed up to develop a B2B sales platform for buying and selling automotive software.