Indian equity benchmarks ended over half percent lower on Wednesday, tracking heavy losses in index heavyweights Larsen & Toubro, Reliance Industries and Bajaj Finserv amid a weak trend in global markets. The markets had started with mild gains and moved in a narrow range throughout the morning, as traders took some support with Trade Promotion Council of India (TPCI) stating that the proposed free trade agreement between India and the European Union would benefit domestic exporters as EU is one of the biggest traditional markets for the country. Traders were also energized as India's exports grew by 52.39 per cent to $7.71 billion during the first week of this month on account of healthy growth in shipments in sectors including engineering, gems and jewellery and petroleum products. Some optimism also came with a private survey stating that as India continues to maintain the momentum of its economic activities, hiring plans are likely to become stable during the July-September 2021 quarter mainly led by transportation and utilities and the services sector. However, the advent of profit-booking dragged the markets lower in the afternoon session. Traders got anxious as the World Bank slashed India's GDP forecast to 8.3 per cent for FY22, the fiscal year starting April 2021, as against its earlier estimate of 10.1 per cent. Besides, Union Finance Minister Nirmala Sitharaman is all set to chair a key meeting on June 11 to review infrastructure projects. Some concern also came as India Ratings and Research warned that the burden of taxation, particularly indirect taxes, on households has worsened lately and is preventing them from spending more on consumption. Finally, the BSE Sensex fell 333.93 points or 0.64% to 51,941.64, while the CNX Nifty was down by 104.75 points or 0.67% to 15,635.35.   

The US markets ended lower on Wednesday as investors largely stayed cautious and refrained from making significant moves ahead of the much-awaited inflation data, due on Thursday. Despite continued optimism about strong economic rebound, the mood in the market was subdued due to concerns over rising inflation and fears about the Federal Reserve starting discussions on tapering its asset buying program sooner than expected. Industrials and financials were the two biggest losers among the 11 S&P 500 sectors, dragging down the broader market. Meme stock mania continued Wednesday with day traders focusing their attention on Clean Energy Fuels this time, pushing the stock up more than 31%. Clover Heath, which surged over 85% in the prior session, pulled back 23% Wednesday.  On the economic data front, data from the Commerce Department showed wholesale inventories in the US rose by 0.8% from a month earlier to $ 698.0 billion in April, after seeing a 1.2% increase in the previous month.

Crude oil futures end marginally lower on Wednesday after data showed a jump in US gasoline stockpiles in the week ended June 4. The Energy Information Administration (EIA) data showed gasoline inventories rose by 7 million barrels in the week as against forecast for an increase of about 1 million barrels. Meanwhile, distillate stockpiles increased by 4.4 million barrels last week, beating forecasts for a 400,000-barrel rise. However, the downside was just marginal as the official data showed crude inventories fell for a third straight week. According to the report released by the EIA, crude inventories in the US dropped by 5.2 million barrels last week, higher than an expected drop of about 4.1 million barrels. Crude oil futures for July fell $0.09 or 0.1 percent to settle at $69.96 barrel on the New York Mercantile Exchange. August Brent crude remained unchanged to settle at $72.22 a barrel on London's Intercontinental Exchange.

Continuing previous session drubbing, Indian rupee concluded weaker against dollar on Wednesday. Traders were worried as World Bank slashed India's GDP forecast to 8.3 per cent for FY22, the fiscal year starting April 2021, as against its earlier estimate of 10.1 per cent. However, downfall remain capped as India's exports grew by 52.39 per cent to $7.71 billion during the first week of this month on account of healthy growth in shipments in sectors including engineering, gems and jewellery and petroleum products. On the global front, dollar clung on to its recent small gains on Wednesday as traders looked to upcoming U.S. inflation data and a European Central Bank (ECB) meeting to gauge the pace of global recovery and policymakers' thinking about paring back stimulus. Finally, the rupee ended 72.97, weaker by 8 paise from its previous close of 72.89 on Tuesday.

The FIIs as per Wednesday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 9825.56 crore against gross selling of Rs 5986.55 crore, while in the debt segment, the gross purchase was of Rs 658.17 crore with gross sales of Rs 899.12 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.82 crore against gross selling of Rs 15.52 crore.

The US markets ended lower on Wednesday as market participants awaited inflation data for clues as to when the US Federal Reserve might tighten its dovish monetary policy. Asian markets are trading in green on Thursday as investors focussed on US inflation data. Indian markets pared gains and ended lower on Wednesday as all key sectors witnessed broad-based selling with auto, banking and metals dragging the most. Today, the start of session is likely to be optimistic following positive cues from Asian peers. The third straight day of daily Covid cases below 100,000 may lend support to investor sentiment. The country reported 93,896 new infections today, taking the total number of confirmed infections in India to 29,182,072 and deaths to 359,695. Traders will be taking encouragement with Finance Ministry report that faster vaccine coverage and frontloading of fiscal measures announced in this year's budget would be the major factors in boosting the investment and consumption cycles and, in turn, reviving the economy, as economic activities have slowed down amid the second wave of Covid-19 and lockdowns across states. Meanwhile, trade between the two most populous nations of the world grew to over $48 billion or 70 percent between January and May 2021. The growing trade value comes even as border issues remain an ever-present thorn in bilateral ties. However, traders may take note of International Zinc Association's (IZA) statement that India loses around 5-7 per cent of its Gross Domestic Product (GDP) every year due to corrosion. There will be some buzz in oil & gas sector stocks with a private report that India's natural gas consumption is recovering in June after declining in the previous two months, as states ease restrictions in the wake of a drop in coronavirus infections. Insurance industry stocks will in focus as non-life insurers have reported an 11.35 per cent rise in gross direct premium income in May, over the same period last year, which was marred by a nationwide lockdown to curb the spread of the coronavirus. Insurers collected premiums of Rs 12,316.5 crore this May, compared to Rs 11,061.02 crore in May 2020. There will be some reaction in sugar stocks with Crisil Ratings' report that profitability of integrated sugar mills is likely to go up by 75-100 basis points (bps) this financial year due to high exports for the second consecutive season and increased supplies of ethanol for blending with petrol.

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

Nifty Top volumes

• Tata Motors has incorporated a new wholly-owned subsidiary to provide end-to-end services of operating, repair, AMC and FMS for its product range, including electric vehicles. 
• Karnataka Industrial Area Development Board has signed a Memorandum of Understanding with HDFC Bank. 
• HCL Technologies' division -- HCL Software has launched its Cloud-Native, Web and Mobile-Ready Version of Domino Application Development Platform. 
• Larsen & Toubro's construction arm has secured orders from prestigious clients for its various businesses.