Indian equity markets ended lower by over a percent in a highly volatile trade on Wednesday, due to selling in Utilities, Power and Oil & Gas stocks amid weak global market trends. After making flat-to-positive start, key gauges fell sharply amid cautiousness among investors ahead of key domestic and US data due on Thursday. India's Q3 GDP data will be released tomorrow and polls indicated that growth moderated to 6.6 per cent in the third quarter of FY24. Some concern also came with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 1,509.16 crore on February 27, 2024. Derivatives expiry on Thursday also fuelled volatility in the domestic markets. Weakness continued over the Dalal Street in afternoon deals, on the back of negative cues from European markets. Traders shrugged off Union Minister of Commerce and Industry Piyush Goyal's statement that with the triple track of strong macroeconomic fundamentals, huge thrust in infrastructure creation and social welfare push India has been at the forefront of global growth for the past decade. The Minister further said that the thrust of increased foreign investments coupled with the nation's contribution of a 3D vision of democracy, demography and demand, India's economy is on fast track. Traders also paid no heed towards report stating that India would benefit from a move of over 70 nations like the UK, UAE and Australia that have agreed to take on additional obligations in the services sector under an agreement of the WTO. Traders took a note of rating agency ICRA's latest report stating that the borrowing cost for states continued to fall for the third week in a row, with the weighted average price falling to 7.44 per cent in the debt auction on February 27, 2024. The cost had remained at a two-year high throughout January sniffing at 7.8 per cent. Finally, the BSE Sensex fell 790.34 points or 1.08% to 72,304.88 and the CNX Nifty was down by 247.20 points or 1.11% to 21,951.15.

The US markets recovered from day's lows but still ended in red on Wednesday with the Dow closing lower for the third consecutive session. Initial weakness on Wall Street came as some traders looked to cash in on the recent strength in the markets ahead of the release of closely watched readings on consumer price inflation on Thursday. The inflation readings, which are said to be preferred by the Federal Reserve, are expected to show the annual rate of consumer price growth slowed to 2.4 percent in January from 2.6 percent in December. The annual rate of growth by core consumer prices, which exclude food and energy prices, is also expected to dip to 2.8 percent in January from 2.9 percent in December. With Fed officials saying they need greater confidence inflation is slowing before they consider cutting interest rates, the data could have a significant impact on the outlook for rates. However, markets trimmed some of their losses after the start of trading with the subsequent recovery attempt potentially reflecting a positive reaction to revised data showing the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2023. The Commerce Department said the jump by real gross domestic product in the fourth quarter was downwardly revised to 3.2 percent from the previously reported 3.3 percent. Street had expected the surge in GDP to be unrevised. On the sectoral front, the weakness among gold stocks came amid a modest decrease by the price of the precious metal, with gold for April delivery edging down $1.40 to $2,042.70 an ounce. Notable weakness was also visible among semiconductor stocks, as reflected by the 1.1 percent loss posted by the Philadelphia Semiconductor Index.

Crude oil futures settled lower on Wednesday after data showed a larger than expected increase in U.S. crude inventories in the week ended February 23rd. Data released by the Energy Information Administration (EIA) showed oil inventories in the U.S. rose by 4.2 million barrels last week, nearly two times the expected increase. The focus now is the upcoming meeting of the Organization of Petroleum Exporting Countries and their allies, collectively known as OPEC+. The OPEC+ is widely expected to extend voluntary production cuts into the second quarter, and there are expectations in some sections that the cut could extend to the end of the year. Benchmark crude oil futures for April delivery fell $0.33 or 0.42% to settle at $78.54 a barrel on the New York Mercantile Exchange. Brent crude for April delivery was down by $0.33 or 0.40% to $83.32 per barrel on London's Intercontinental Exchange.

Indian rupee ended lower on Wednesday tracking bearish equity markets and foreign fund outflow amid increased month-end demand for the American currency. Traders were cautious amid a private report stating that while it seems increasingly unlikely the US economy is headed for recession, small businesses still face headwinds like higher costs and difficulty retaining qualified workers. Traders shrugged off rating agency ICRA's latest report stating that the borrowing cost for states continued to fall for the third week in a row, with the weighted average price falling to 7.44 per cent in the debt auction on February 27, 2024. The cost had remained at a two-year high throughout January sniffing at 7.8 per cent. On the global front, dollar firmed up on Wednesday as markets awaited a raft of global inflation data for clues on when central banks may start easing policy, while the New Zealand dollar tumbled after its central bank trimmed its forecast for a peak in rates. Finally, the rupee ended at 82.91 (Provisional), weaker by 2 paise from its previous close of 82.89 on Tuesday.

The FIIs as per Wednesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 18357.35 crore against gross selling of Rs 16301.38 crore, while in the debt segment, the gross purchase was of Rs 1506.97 crore with gross sales of Rs 326.73 crore. Besides, in the hybrid segment, the gross buying was of Rs 54.26 crore against gross selling of Rs 41.98 crore.

The US markets ended lower on Wednesday ahead of a key inflation reading that could heavily influence expectations on timing of rate cuts. Asian markets are trading mixed on Thursday in anticipation of more cues on U.S. interest rates from key inflation data. Indian markets, after one-day hiatus, resumed their broad-based downward trend on Wednesday led by profit booking in Reliance Industries, ICICI Bank, Power Grid, Maruti Suzuki, M&M, HDFC Bank, and L&T. Today, markets are likely to get slightly positive start after having suffered heavy losses in the previous session. Some support will come as economic think tank National Council of Applied Economic Research (NCAER) in report said that high frequency indicators reveal that the Indian economy remains resilient with Purchasing Manager's Index (PMI) for services accelerating and manufacturing regaining momentum. Further, NCAER said the composite PMI accelerated to 61.2 in January from 58.5 in December 2023. Meanwhile, the report by the Boston Consulting Group (BCG) and Retailers Association of India (RAI) said that India's retail sector is expected to grow at 9-10 per cent to reach $2 trillion in the next decade with the country's consumption story continuing to remain strong with steady growth. However, there will be some volatility in the markets ahead of the impending expiry of February series derivative contracts. Also, investors await the PCE inflation index in the US and India's Q4 GDP data later in the day. There are expectations that India's economic growth probably slipped below 7% for the first time in the current fiscal year in the October-December period, hit by a tepid manufacturing sector and weakness in consumption. Besides, a report by SBI Research said the Indian economy is likely to grow at 6.7-6.9 per cent in December quarter FY24 as compared to 7.6 per cent growth in the second quarter on poor performance in the farm sector. Foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 1,879.23 crore on February 28, provisional data from the NSE showed. There will be some reaction in semiconductor sector stocks as Union Minister of State for Electronics & Technology Rajeev Chandrasekhar said India has made significant strides in the semiconductor sector in the last two years and during this period, Rs 2.50 lakh crore worth of investment proposals have been received by the government from global chip makers. Real estate industry stocks will be in limelight with a private report that housing demand in India scaled up and prices across the top eight cities surged by about 20 per cent during 2021-2023. Meanwhile, the Nifty Next 50 Index will include Adani Power, Indian Railway Finance Corporation, Jio Financial, Power Finance Corp and REC. These companies will be replaced Adani Wilmar, Muthoot Finance, PI Industries, Procter & Gamble Hygiene and Shriram Finance. Moreover, GPT Healthcare is set to make Dalal Street debut today.

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

Nifty Top volumes

• Mahindra & Mahindra has launched the Thar Earth Edition, builds upon the Mahindra Thar's legacy of adventure and exploration.
• Coal India has signed a JVA with BHEL to form a JV Company to undertake Coal to Chemicals business by initially setting up a Coal to 2000 TPD Ammonium Nitrate Plant using BHEL's in-house developed PFBG technology.
• LTIMindtree has joined the IBM Quantum Network to explore quantum computing innovation for the benefit of its global clientele across multiple industries.
• Tech Mahindra has signed a MoU with Pegatron, a global leader in technology and electronics manufacturing at Mobile World Congress 2024.