Indian benchmark indices ended the session on a negative note, dragged by fall in midcaps as well as escalating cross border tensions. Pakistani fighter jets flew near the Siachen Glacier today, according to a media report, but Indian Air Force sources said there was no violation of India's air space. Also, Pakistan's Air Force chief warned that his forces will respond to any aggression by the enemy in a manner that their future generations will also remember it. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory as investors turned cautious ahead of the F&O expiry of May series due tomorrow. Market participants also awaited the minutes of US Federal Reserve's May policy meeting due later in the day for clues about its next interest rate hike. Sentiments remained dismal on the report that weak investment activity, as reflected in the slow output growth in capital goods and infrastructure, is likely to depress Indian gross value added (GVA) growth to around 6.6 per cent in the fourth quarter ended March.  The report also indicated that the transition to Goods and Services Tax (GST) is also likely to create some disruption and impact the short-term sales volume across businesses. However, losses remained capped with Prime Minister Narendra Modi's statement that our aim is that India must be an engine of growth as well as an example in climate friendly development in the years to come. Finally, the BSE Sensex lost 63.61points or 0.21% to 30301.64, while the CNX Nifty was down by 25.60 points or 0.27% to 9,360.55.

The US markets closed higher on Wednesday, as minutes of the Federal Reserve's latest policy meeting showed broad agreement on plans to begin shrinking the central bank's balance sheet and also pointed to a likely rate increase next month, as widely expected. The minutes of the early May meeting showed that members were in agreement on a general approach to unwinding the massive balance sheet built up over the course of the asset-buying spree that was at the center of the Fed's quantitative easing strategy. The minutes also showed most Fed officials agreed it would soon be time to raise rates again. Federal Reserve officials were in broad agreement at their May 2-3 meeting on a general approach to shrinking the bank's massive balance sheet. On the economy front, sales of previously-owned homes sputtered in April after a supercharged first quarter, as lean inventory continued to constrain demand. Existing-home sales ran at a seasonally adjusted annual rate of 5.57 million. That was a 2.3% decline from March's selling pace, which was revised down a tick but still stood at a 10-year high, though 1.6% higher compared to a year ago in April. The Dow Jones Industrial Average gained 74.51 points or 0.36 percent to 21,012.42, Nasdaq added 24.31 points or 0.40 percent to 6,163.02, while S&P 500 edged higher by 5.97 points or 0.25 percent to 2,404.39.

Crude oil futures snapped their winning streak on Wednesday, despite word that OPEC will agree to extend its supply quota plan. Traders also overlooked the bullish report from the Energy Information Administration (EIA), showing U.S. crude inventories fell more than expected in the previous week. EIA said that crude oil inventories fell by 4.43 million barrels. Gasoline inventories dropped by only 0.485 million, while distillate stockpiles fell by 0.485 million barrels. Meanwhile, Kuwait, Iraq, Oman and Venezuela supported the Saudi-Russia agreement that production curbs needed to be extended for a period of nine-months until March 2018, to reduce global supply to the five-year average. Benchmark crude oil futures for June delivery ended lower by $0.11 or 0.2 percent to $51.36 on the New York Mercantile Exchange. In London, Brent crude for July delivery ended down by $ 0.19 to $53.95 on the ICE.

Indian rupee ended stronger against dollar on Wednesday, due to selling of greenback by banks and exporters. Sentiments remained positive with Prime Minister Narendra Modi's statement that India has improved upon all the macro-economic indicators over the last three years mainly due to universal banking & universal biometric identification and noted that the fiscal deficit, balance of payments deficit and inflation in the country has reduced, while GDP growth rate, foreign exchange reserves and public capital investments have increased. However, dollar strengthens against other major currencies overseas along with some losses in the domestic equity market weighted on the rupee sentiments. On the global front, dollar held firm against its major rivals, ahead of the release of Federal Reserve meeting minutes that are largely expected to back expectations for another interest-rate hike come June.  Finally, the rupee ended at 64.73, 16 paise stronger from its previous close of 64.89 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 5782.50 crore against gross selling of Rs 6148.58 crore, while in the debt segment, the gross purchase was of Rs 2182.63 crore with gross sales of Rs 533.22 crore.

The US markets extended their gains in last session and the S&P 500 reached a new record closing high. The gains came following the release of the minutes of the Federal Reserve's latest monetary policy meeting, which noted that growth in economic activity had slowed, although the Fed members agreed that the slower growth during the first quarter was likely to be transitory. The Asian markets have made mostly a green start supported by the gains in oil prices which reached a one month high ahead of the key meeting from crude producing countries. The Japanese market was up by over half a percent as yen declined. The Indian markets ended lower in last session, reversing all their early gains on sluggish global cues, today the start of the F&O series expiry session is likely to be in green on positive global cues. Traders will also be getting some support with government in its bid to support the initiative ‘Make in India' and easing the flow of foreign capital into the country, dismantling the Foreign Investment Promotion Board (FIPB), which currently vets FDI proposals requiring the government approval. FIPB will be replaced by a new mechanism under which the proposals will be approved by the ministries concerned as per the standard operating procedure approved by the Cabinet. There will be some cautiousness too, with industry body Assocham stating that implementing GST from July 1 will be a challenge for the industry and the government should consider relaxing penal provisions for a couple of quarters to help it comply with the new tax regime. There will be some buzz in the sugar stocks, as the Cabinet Committee on Economic Affairs (CCEA) has decided to increase fair and remunerative price (FRP) of sugarcane by Rs 25 per quintal to Rs 255 for 2017-18 season beginning October, though the FRP for the ongoing 2016-17 season has been kept unchanged at Rs 230 per quintal. There will be lots of earnings announcements to keep the markets in action.

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

Nifty Top volumes

• Bank of Baroda has entered into a Memorandum of Understanding with IFFCO to roll out their first set of co-branded debit cards for farmers.
• Tata Motors has reduced its managerial workforce by up to 1,500 people domestically as part of an organisational restructuring exercise.
• Dr. Reddy's Laboratories has joined hands with the Department of Science and Technology and University of Hyderabad to initiate a project on discovery and development of anti-psoriatic drugs.
• Lupin has reported a fall of 49.16% in its consolidated net profit at Rs 380.21 crore for the quarter ended March 31, 2017 as compared to Rs 747.88 crore for the same quarter in the previous year.