Tuesday turned-out to be a lackluster day of trade for Indian equity benchmarks, with frontline gauges trading in green and red throughout the session to end flat. Traders remained cautious with president of the International Economic Association, and former chief economist at the World Bank, Kaushik Basu's statement that in the event of US-China currency war there will be a sideline effect on India and a depreciation of the rupee, which, if managed well by policymakers, will be good for the country. Anxiety also spread among investors, with a report stating that the rupee is over-valued and the fair value of the local currency is 70-71 to a greenback. The widening current account deficit and higher interest rates have made the rupee the worst among its Asian peers so far this year. However, traders took some solace with rating agency ICRA's report that revenues of Indian corporates have grown by 22% in the June quarter from a year ago. It added that the increase in revenues has been attributed to the strong growth in both consumer-based industries such as consumer goods, and auto; and commodity sectors such as cement, iron, steel, and oil and gas. Traders also took note of a report that the government will set up a group of ministers (GoM) to look into issues related to the proposed mega free trade agreement the Regional Comprehensive Economic Partnership (RCEP). Meanwhile, the government withdrew the Financial Resolution and Deposit Insurance (FRDI) Bill following widespread concerns over certain provisions in the proposed legislation. There have been concerns over the proposed bail-in clause to resolve a failing bank and insurance cover on bank deposits. Finally, the BSE Sensex shed 26.09 points or 0.07% to 37,665.80, while the CNX Nifty was up by 2.35 points or 0.02% to 11,389.45.

The US markets ended higher on Tuesday, with the Nasdaq gaining for a sixth straight day in a row, longest winning streak since March, as the churn of positive earnings overshadowed investor concerns over recently proposed tariffs in the US-China trade dispute. Second-quarter results so far have been stellar, with S&P 500 companies reporting earnings growth of 24% and sales gains of 9.8%. Strong earnings have helped to bolster the belief that steady US economic growth will continue to support corporate bottom lines and keep stocks buoyant. The earnings season has been good and that's helped investors realize there are strong fundamentals to justify the high prices. However, trading activity remained somewhat subdued with a lack of major US economic data keeping some traders on the sidelines. The economic calendar remained relatively light throughout the week, although reports on producer and consumer price inflation are likely to attract attention in the coming days. On the economic front, the latest report from the Labor Department showed there were 6.66 million job openings at the end of June, up fractionally from May's levels and the third highest in history. Dow Jones Industrial Average surged 126.73 points or 0.50 percent to 25628.91, the S&P 500 gained 8.05 points or 0.28 percent to 2858.45 and Nasdaq was up by 23.99 points or 0.31 percent to 7883.66.

Crude oil futures ended higher on Tuesday, with reinstated the US sanctions against Iran seen as a threat to global supplies, especially following Saudi Arabia's production has also recently contracted. Both contracts have gained for two of the past three sessions, moving within a relatively narrow range. Besides, the US Energy Information Administration lowered its 2019 forecast on US crude-oil production to 11.7 million barrels a day, versus 11.8 million barrels a day issued in July. It also now expects 2018 output at 10.7 million barrels per day, fractionally down from 10.79 million barrels projected last month. Benchmark crude oil futures for September gained 16 cents or 0.2 percent to settle at $69.17 a barrel on the New York Mercantile Exchange. October Brent crude rose 1.2 percent at $74.65 a barrel on London's Intercontinental Exchange.

Reversing previous session's losses, Indian rupee staged a smart recovery against dollar on Tuesday, due to heavy dollar selling by banks and exporters. Besides, the dollar losing muscle against other currencies overseas too supported the rupee. Market participants overlooked a report stating that the rupee is over-valued and the fair value of the local currency is 70-71 to a greenback. The widening current account deficit and higher interest rates have made the rupee the worst among its Asian peers so far this year. On the global front, US dollar fell on Tuesday as market sentiments were weighed upon by US sanctions on Iran. Finally, the rupee ended at 68.68, 20 paise stronger from its previous close of 68.88 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 4420.35 crore against gross selling of Rs 3972.93 crore, while in the debt segment, the gross purchase was of Rs 465.68 crore with gross sales of Rs 119.85 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.33 crore against gross selling of Rs 3.93 crore.

The US markets ended higher for third straight session on Tuesday, with strong corporate earnings reports lifting major indexes as tariff tensions simmer. Asian markets were trading mostly in green on Wednesday, on the back of firmer Wall Street earnings, while expectations for increased Chinese stimulus helped take the edge off wider concerns about the worsening Sino-US trade dispute. Indian equity markets retreated from record highs and ended the Tuesday's session with marginal losses, due to profit-booking by funds and retail investors. Today, the markets are likely to make a cautious start, as there will be some concern with ICRA's latest report that in spite of corporates witnessing a healthy 22% revenue growth in the June quarter, most have seen flat margins, with airline and cement companies seeing declining margins due to rising input costs and crude prices. Traders will also be reacting to Care Ratings' report that there has been a marginal decline of 1% in employment growth at 6.6%, mainly due to a larger number of companies having witnessed lower or negative hiring growth. It added that the employment growth in 2016-17, was at 7.7%. Meanwhile, the Lok Sabha has approved the first batch of supplementary demands for grants envisaging a gross additional outgo of Rs 11,697.92 crore for the current fiscal. There will be buzz in the banking sector stocks with report that Indian banks reported a total loss of about Rs 70,000 crore due to frauds during the last three fiscals up to March 2018. The extent of loss in fraud cases reported by scheduled commercial banks (SCBs) for 2015-16, 2016-17 and 2017-18 was Rs 16,409 crore, Rs 16,652 crore and Rs 36,694 crore, respectively. Also, there will be buzz in the textile sector stocks with report that the government doubled import duty on as many as 328 textile products to 20% to provide a boost to manufacturing of these items in the country. There will be some important earnings announcements too to keep the markets buzzing. Besides, CreditAccess Grameen will open its initial public offer (IPO) for subscription on August 8. The company has fixed a price band at Rs 418-422 per share for the issue which will close on August 10 and it is likely to make a debut on August 20.

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

Nifty Top volumes

• Cipla has received final approval for its ANDA for Diclofenac Sodium Topical Gel, 1% from the USFDA. 
• Reliance Industries has acquired 5% stake in Eros International plc, entertainment firm, following customary approval processes. 
• L&T's construction arm -- L&T Construction -- has won orders worth Rs 1,904 crore across various business segments. 
• Mahindra & Mahindra has reported 62.91% rise in its net profit at Rs 1,220.96 crore for Q1FY19 as compared to Rs 749.46 crore for Q1FY18.