Bulls tightened grip on Dalal Street on Tuesday with Sensex and Nifty hitting fresh closing high and settling above their crucial 38,800 and 11,700 levels, respectively. After a decent opening, benchmarks traded firmly and fervently gained from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Markets started the session on an optimistic note with Economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report retaining India's growth forecast for the current fiscal at 7.4%, citing comfortable agricultural sector outlook and a marked improvement in the external sector. Adding to the optimism Commerce Minister Suresh Prabhu said that the government is working on a comprehensive strategy in a bid to double India's export by the year 2025. He also said that the meeting of different exports' stakeholders discussed a strategy for revitalizing India's exports. Markets added gains in last leg of trade to end near all-time closing highs, as some support came with the Department of Industrial Policy and Promotion's (DIPP) latest data showing that foreign direct investment (FDI) in India grew by 23% to $12.75 billion during the April-June quarter of 2018-19, as compared to foreign fund inflows of $10.4 billion in April-June 2017-18. Traders also took encouragement with finance minister Arun Jaitley's statement the government is looking at achieving economic growth higher than predicted by many in the current financial year and India could become the fifth largest economy (surpassing the UK) next year. Traders shrugged off State Bank of India's (SBI) research report Ecowrap that India's current account deficit (CAD) is likely to touch 2.8% of the Gross Domestic Product (GDP) in the current fiscal (FY19) on account of surge in crude oil prices and moderate growth in exports. It also said that even merchandise trade imbalance is expected to increase to Rs 188 billion in FY19 as against Rs 160 billion in FY18. Finally, the BSE Sensex surged 202.52 points or 0.52% to 38,896.63, while the CNX Nifty was up by 46.55 points or 0.40% to 11,738.50.

The US markets ended marginally higher on Tuesday with the S&P 500 and the Nasdaq finishing at records for a third consecutive session after a measure of consumer confidence hit a nearly 18-year high, underscoring a continued expansion of the US economy. A report released by the Conference Board showed an unexpected improvement in US consumer confidence in the month of August. The Conference Board said its consumer confidence index surged up to 133.4 in August from an upwardly revised 127.9 in July. Street had expected the index to dip to 126.8 from the 127.4 originally reported for the previous month. With the unexpected increase, the consumer confidence index reached its highest level since hitting 135.8 in October of 2000. These historically high confidence levels should continue to support healthy consumer spending in the near-term. Besides, the gains came a day after investors cheered a report that proposed trade deal between the US and Mexico. However, the gains were muted, with indexes closing off of intraday peaks. Some cautiousness prevailed in markets with Standard & Poor's report that home price growth in major US metropolitan areas unexpectedly slowing in the month of June. The report said the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index was up by 6.3% year-over-year in June compared to the 6.5% increase in May. Dow Jones Industrial Average gained 14.38 points or 0.06 percent to 26064.02, the S&P 500 added 0.78 points or 0.03 percent to 2897.52 and Nasdaq was up by 12.14 points or 0.15 percent to 8030.04.

After two sessions of consecutive gains, Crude oil futures ended lower on Tuesday, but losses were modest as traders fretted over signs of receding output and braced for the latest weekly US crude inventory data. Renewed US sanctions on Iran and supply disruptions in Libya and Venezuela have supported oil prices, amid data showing growing output from major producers such as Saudi Arabia and Russia. US sanctions on oil exports go into effect in November, with investors estimating more than 1 million barrels daily being taken off line. Benchmark crude oil futures for October declined 34 cents or 0.5 percent to settle at $68.53 a barrel on the New York Mercantile Exchange. October Brent crude dropped 26 cents or 0.3 percent at $75.95 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally higher against dollar on Tuesday, owing to dollar sale by exporters and banks. Sentiments turned optimistic with Economic policy think-tank, the National Council of Applied Economic Research (NCAER) in its latest report retaining India's growth forecast for the current fiscal at 7.4%, citing comfortable agricultural sector outlook and a marked improvement in the external sector. However, gains were limited with State Bank of India's (SBI) research report Ecowrap that India's current account deficit (CAD) is likely to touch 2.8% of the Gross Domestic Product (GDP) in the current fiscal (FY19) on account of surge in crude oil prices and moderate growth in exports. On the global front, dollar held near a one-month low against a basket of its rivals on Tuesday as a US-Mexico trade deal aimed at overhauling the North American Free Trade Agreement boosted appetite for riskier assets. Finally, the rupee ended at 70.10, 5 paise stronger from its previous close of 70.15 on Monday.

The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 4261.15 crore against gross selling of Rs 3825.31 crore, while in the debt segment, the gross purchase was of Rs 677.55 crore with gross sales of Rs 412.10 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.14 crore against gross selling of Rs 1.83 crore.

The US markets ended slightly in green on Tuesday after a measure of consumer confidence hit a nearly 18-year high, underscoring a continued expansion of the US economy. Asian markets were trading mixed in early deals on Wednesday as optimism over the US-Mexico trade deal was quickly replaced by caution ahead of a looming deadline on tariffs with China. Indian equity markets extended their gains for second straight session to end at new intra-day high levels on Tuesday as sentiments remained bullish largely in tandem with positive global cues as investors cheered the news of a trade deal between the US and Mexico. Today, the markets are likely to make a cautious start amid muted global cues. Investors are looking ahead the latest developments on global trade and the upcoming derivatives expiry. There will be some cautiousness with a private report that the Indian economy is in for a rough ride, with rising oil prices set to continue weighing on its already-weakened currency, widen its deficit, and affect its growth outlook. However, traders may get some encouragement with Care Ratings in its latest report bet on a higher GDP growth April-June quarter as compared to the last year. Meanwhile, NSE Indices on Tuesday announced a minor rejig in the benchmark Nifty50 index by replacing pharma stock Lupin with JSW Steel from September 28, 2018. Besides, the department of industrial policy and promotion (DIPP) has effectively ruled out foreign direct investment (FDI) in inventory-based ecommerce, allaying concerns raised by those opposed to such a move, even as it agreed with the need for a regulator to oversee the sector. There will be some cautiousness in the banking sector with credit rating agency ICRA's statement that the total loss before tax for public sector banks (PSBs) in FY19 is estimated at Rs 41,900-1,01,600 crore, depending on the credit provisioning on stressed assets undergoing resolution. There will be some buzz in the telecom sector stocks with a report that India Ratings and Research (Ind-Ra) has maintained a negative-to-stable outlook on telecom sector for the rest of FY19, saying weak revenue per user and high capex will continue to suppress the sectoral credit outlook.

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

Nifty Top volumes

• Tech Mahindra and Microsoft have partnered to develop blockchain-based technology to curb pesky calls and SMS as recommended by telecom regulator Trai. 
• Larsen & Toubro's Shipyard at Kattupalli has launched the third offshore patrol vessel. 
• Lupin has received final approval for its Gabapentin Tablets USP, 600 mg and 800 mg from the USFDA. 
• Eicher Motors' Trucks & Buses, a part of VECV, has bagged an order for 350 heavy duty trucks from Bangladesh Road Transport.