Indian benchmark indices halted a two-day rally and ended the Wednesday's session on negative note, with Sensex and Nifty breaching their crucial psychological 51,900 and 15,450 levels, respectively. Markets traded in red since the beginning, on the back of heavy selling pressure coupled with weak Asian cues. The market participants remained worried with RBI data showed that operating profit growth of listed private companies decelerated across broad sectors in the January-March quarter of 2021-22, on the back of rise in expenditure. Operating profit of manufacturing companies decelerated sharply to 7 per cent in the fourth quarter of last fiscal as against 70 per cent in the corresponding quarter of the preceding fiscal. Unabated foreign fund outflows also played spoilsport for the markets. As per exchange data, foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,701.21 crore on Tuesday. Further, in the late afternoon deals, the markets extended their fall to close near day's low point, as sentiments on the street weakened further after the CBDT said that the Income Tax department has detected unaccounted income of over Rs 100 crore after it recently raided a diversified business group engaged in the export of handicraft and real estate among others. Some pessimism also came after private report stated that oil prices rose $2 per barrel on June 21, 2022 on high summer fuel demand while supplies remain tight because of sanctions on Russian oil after its invasion of Ukraine. The street overlooked Minister for commerce and industry and textiles -- Piyush Goyal expressed hope that the free trade agreement (FTA) between India and the United Kingdom will be concluded by Diwali. Total trade between India and the UK stood at $16 billion in FY22 (Apr-Feb). Finally, the BSE Sensex fell 709.54 points or 1.35% to 51,822.53 and the CNX Nifty was down by 225.50 points or 1.44% to 15,413.30.

The US markets ended marginally lower on Wednesday as traders reacted to Federal Reserve Chair Jerome Powell's testimony before the Senate Banking Committee. In prepared remarks, Powell indicated the Fed plans to continue moving expeditiously to combat inflation but argued the US economy is strong enough to handle tighter monetary policy. However, Powell acknowledged that achieving a soft landing will be very challenging due in part to factors outside of the Fed's control and noted a recession is certainly a possibility. Powell said the pace of future interest rate hikes will be dependent on incoming data and the evolving outlook for the economy and suggested the Fed will need to see compelling evidence that inflation is slowing before it begins to scale back its monetary policy tightening plans. The Fed Chief said the central bank will still strive to avoid adding uncertainty in what is already an extraordinarily challenging and uncertain time. On the sectoral front, Energy stocks showed a substantial move to the downside on the day, moving sharply lower along with the price of crude oil. Crude for August delivery tumbled $3.33 to $106.19 a barrel amid concerns about the outlook for demand. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 5.2 percent and the NYSE Arca Oil Index plunged by 4.5 percent. Significant weakness also emerged among steel stocks, as reflected by the 3.9 percent nosedive by the NYSE Arca Steel Index. The index ended the session at its lowest closing level in over six months.

Crude oil futures ended deeply in red on Wednesday on account of concerns about the outlook for energy demand due to slowing global growth following sharp interest rate hikes by central banks. Meanwhile, US President Joe Biden administration's move to push for fuel cost cuts also weighed on oil prices. To curtail rising gas prices, Biden is expected to call for temporarily suspending the 18.4-cents a gallon federal tax on gasoline. Benchmark crude oil futures for August delivery fell $3.33 or 3 percent to settle at $106.19 a barrel on the New York Mercantile Exchange. Brent crude for August delivery dropped $3.25 or 2.82 percent to settle at $111.40 a barrel on London's Intercontinental Exchange.

Continuing its fall for the second day in a row, Indian rupee ended weaker against dollar on Wednesday, due to unabated foreign fund outflows and losses in the domestic equities. According to the stock exchange data, foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,701.21 crore on Tuesday. Traders remain concerned after private report stated that oil prices rose $2 per barrel on June 21, 2022 on high summer fuel demand while supplies remain tight because of sanctions on Russian oil after its invasion of Ukraine. A stronger greenback overseas also weighed on the rupee sentiment. On the global front, the safe haven dollar gained ground on most peers on Wednesday as investors turned nervous again about global growth prospects, while the yen hit a fresh 24-year low as elevated bond yields in the US and Europe contrasted with low Japanese interest rates. Finally, the rupee ended at 78.32 (provisional), weaker by 19 paise from its previous close of 78.13 on Tuesday.

The FIIs as per Wednesday's data were net sellers in equity segment, while net buyers in debt segments. In equity segment, the gross buying was of Rs 5406.25 crore against gross selling of Rs 6583.48 crore, while in the debt segment, the gross purchase was of Rs 510.50 crore against gross selling of Rs 260.39 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.00 crore against gross selling of Rs 6.82 crore.

The US markets ended lower on Wednesday as energy shares weighed and investors digested Fed Chair Jerome Powell's comments on the US central bank's aim to bring down inflation. Asian markets are trading mostly in red on Thursday as investors continued to monitor recession concerns. Indian markets ended a two-day pullback on Wednesday amid weakness across sectors, as nervousness persisted across global markets. Today, markets are likely to make cautious start amid weak global cues. Traders will be concerned as the Reserve Bank said India witnessed a current account deficit of 1.2 per cent of GDP in 2021-22 against a surplus of 0.9 per cent in FY2020-21 due to a wider trade deficit. There will be some cautiousness as minutes of the central bank's meeting showed that the RBI Governor Shaktikanta Das has cautioned that continued high inflation is a major concern for the economy, even as economic activities are gaining traction while voting for a 50 basis points hike in key interest rate to check price rise earlier this month. Selling in FIIs is also likely to weight on markets. Foreign institutional investors (FIIs) have net sold Rs 2,920.61 crore worth of shares on June 22. However, some support may come as Prime Minister Narendra Modi said the government expects the Indian economy to grow by 7.5 per cent this year. Modi also said the value of the Indian digital economy will reach $1 trillion by 2025. Meanwhile, an Indian ministerial panel will meet next week to discuss a goods and services tax on cryptocurrency transactions. Aviation industry stocks will be in limelight as the data shared by the Directorate General of Civil Aviation (DGCA) showed that domestic air passenger traffic jumped to 1.2 crore in May 2022, marking a surge of 11 percent as compared to the preceding month. There will be some reaction in Telecom stocks as in a big relief for telecom companies, the Department of Telecommunications (DoT) has scrapped the 3 per cent floor rate on spectrum usage charge (SUC). Edible oil industry stocks will be in focus as Food Secretary Sudhanshu Pandey said oil prices in the retail market have started easing with softening of international rates and the government's timely intervention.

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

Nifty Top volumes

• ONGC is seeking a minimum $17 price for the gas it plans to produce from coal seams in its Bokaro CBM block in Jharkhand.
• HDFC Life Insurance Company has raised Rs 350 crore by allotting 3,500 unsecured, rated, listed, subordinated, redeemable, fully paid-up, NCDs, each having a face value of Rs 10 lakh for cash, at par, in dematerialized form, on private placement basis. 
• GAIL (India) has planned to enter into distributed Liquefied Natural Gas production with the vision to cater the demand from off-grid locations and transport sector. 
• HDFC Bank is planning to double its network of branches in the next three to five years by opening 1,500 to 2,000 branches every year.