Indian equity benchmarks have showcased a strong performance on Wednesday, by gaining over a percent in the session and settling above the psychological 10,400 (Nifty) and 35,400 (Sensex) levels. After making a cautious start, markets gained traction and traded in fine fettle, as the data released by the Reserve Bank of India (RBI) showed that India's current account balance recorded a marginal surplus in the January-March quarter of FY20. Traders also took note of the Reserve Bank of India's data showing that direct investment into the country rose by $19 billion during 2019-20. Sentiments remained optimistic with Union Minister Nitin Gadkari's statement that the government is looking at ways to boost India's exports. He is also hopeful that a solution will be found in the next 4-6 months to address the issue of delay in payment to micro, small and medium enterprises. Benchmark indices gained more strength in late afternoon session, as investors' morale remained upbeat with Niti Aayog Vice Chairman Rajiv Kumar's statement that India's economy will recover following the containment of COVID-19 pandemic, and ongoing reforms would keep the country's growth rate ahead of peers. The market participants overlooked weak economic data. The growth of eight core infrastructure industries has contracted by 23.4 percent in May 2020 as compared to same period of last year, due to the coronavirus-induced lockdown.  Traders also paid no heed towards Fitch Ratings in its June update of Global Economic Outlook lowered India's growth forecast for financial year 2021-22 to 8 percent from 9.5 percent projected last month. However, the rating agency retained its projection of Indian economy contracting by 5 percent in the current fiscal (FY21).  It projected Indian economy to grow 5.5 percent in 2022-23. Finally, the BSE Sensex gained 498.65 points or 1.43% to 35,414.45, while the CNX Nifty was up by 127.95 points or 1.24% to 10,430.05.

The US markets ended mostly higher on Wednesday, after drug giant Pfizer and German biotech company BioNTech announced positive data from an early-stage human trial of a potential coronavirus vaccine. The companies said the most advanced of four investigational vaccine candidates was generally well tolerated and produced neutralizing antibodies. Further, market participants parsed minutes from the Fed's June 9-10 meeting, where the rate-setting Federal Open Market Committee agreed to provide clarity in future communications about what would cause the central bank to keep rates close to zero or move them higher. The committee kept federal-funds rates at a range between 0% and 0.25% and signaled that it might hold levels there until at least 2022. Adding to positive sentiment on markets, the Institute for Supply Management (ISM) released a report showing US manufacturing activity unexpectedly expanded in the month of June. The ISM said its purchasing managers index jumped to 52.6 in June from 43.1 in May, with a reading above 50 indicating an expansion in manufacturing activity. Street had expected the index to climb to 49.5, which have still indicated a modest contraction in manufacturing activity. A separate report released by payroll processor ADP showed a significant increase in private sector employment in the month of June as well as a substantial upward revision to the data for May. ADP said private sector employment jumped by 2.369 million jobs in June, which was below street estimates for a spike of about 3.000 million jobs. However, revised data showed private sector employment soared by 3.065 million jobs in May compared to the previously reported loss of 2.760 million jobs.

Crude oil futures ended higher on Wednesday after a US government report showed the largest weekly decline in domestic crude inventories so far this year. The Energy Information Administration (EIA) reported that US crude inventories fell by 7.2 million barrels for the week ended June 26. That followed three consecutive weeks of increases. S&P Global Platts had forecast an average crude supply decline of 2.7 million barrels, while the American Petroleum Institute reported a fall of 8.2 million barrels. The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged down by about 200,000 barrels for the week. Crude oil futures for August gained 55 cents or 1.4 percent to settle at $39.82 a barrel on the New York Mercantile Exchange. September Brent crude rose 76 cents or 1.8 percent to settle at $42.03 a barrel on London's Intercontinental Exchange.

Indian rupee ended weaker against dollar on Wednesday, on emergence of demand for the greenback from importers. Investors' sentiment remained fragile as India's core sector growth contracts by 23.4 percent in May 2020 as compared to same period of last year, due to the coronavirus-induced lockdown. Besides, hit by sharp contractions in both output and new orders, Indian manufacturing activity also remained sluggish in the month of June. However, gains in domestic equity markets provided some support to the rupee, keeping the downside in check. On the global front; currency traders were broadly cautious on Wednesday, with the Japanese yen seeing its first session of gains in more than a week, before key European and U.S. economic data. Finally, the rupee ended at 75.60, 9 paise weaker from its previous close of 75.51 on Tuesday.

The FIIs as per Wednesday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 4805.28 crore against gross selling of Rs 6748.07 crore, while in the debt segment, the gross purchase was of Rs 911.92 crore with gross sales of Rs 935.26 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.95 crore against gross selling of Rs 12.08 crore.

The US markets ended mostly higher on Wednesday after drug giant Pfizer and German biotech company BioNTech announced positive data from an early-stage human trial of a potential coronavirus vaccine. Asian markets are trading in green on Thursday following positive news overnight around the development of a potential coronavirus vaccine. Indian markets ended higher with significant gains on Wednesday, after a survey showed the pace of contraction in India's manufacturing sector slowed further in June. Today, the markets are likely to make positive start following gains in Asian peers. Traders will be taking encouragement with Finance minister Nirmala Sitharaman's statement that the government is committed to undertaking refo­rms to make the tax administration simple for businesses, particularly the micro, small and medium enterprises (MSMEs). Traders may take note that traders' body CAIT suggested a host of measures, like technical audits and waiver of late fees, to broaden the GST base and make the taxation system simple. However, there may be some cautiousness with over 19,000 cases being reported in the last 24 hours, India's total tally of coronavirus cases has crossed the 600,000 mark. At present, the country has 605,220 cases, of which 17,840 are fatalities. Traders may also be concerned as the International Labour Organisation (ILO) has warned that if another Covid-19 wave hits in the second half of 2020, there would be global working-hour loss of 11.9 per cent - equivalent to the loss of 340 million full-time jobs. Meanwhile, SEBI came out with a set of standard operating procedures for stock exchanges, clearing corporations and depositories to deal with possible defaults by trading or clearing members. The framework, which will come into force from August 1, is aimed at protecting the interest of non-defaulting clients of trading members or clearing members in the likely event of default by trading member or clearing member. There will be some buzz in the metal stocks as the government assured steel makers that it will take appropriate measures to reduce the logistics cost of products that currently reaches as high as 28 percent. Banking stocks will be in focus with Fitch Ratings' report that Indian banks may continue to face heightened asset quality and earning pressure for at least two years, as disruption to business activity and supply chains and shrinking personal incomes damage banks' balance sheets.

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

Nifty Top volumes

• Hero MotoCorp has commenced the dispatches of its eagerly-awaited new motorcycle - the Hero Xtreme 160R. 
• IOC, NTPC and South Delhi Municipal Corporation have signed a tripartite MoU for development of a facility to convert municipal waste into electricity. 
• Reliance Industries is planning to acquire retail businesses of Kishore Biyani's Future Group. 
• NTPC has declared commercial operation of Unit-2 of 150 MW of Kameng Hydro-Electric Project (4x150 MW) of North Eastern Electric Power Corporation.