Indian equity benchmark indices pared most of their early losses to settle with minor cut on Wednesday, as investors stayed cautious ahead of the CPI inflation data for July which will be released later in the day. Key indices made gap-down opening, following lackluster macroeconomic data and concerns over rising coronavirus cases. Government data showed India's industrial production declined by 16.6 per cent in June, on account of disruption in normal business activity following the outbreak of coronavirus pandemic. Some cautiousness also prevailed in the markets with a private report that the MSMEs will take at least 7-8 months to recover from the impact of COVID-19 pandemic, and the recovery rate of an enterprise will depend on factors like its rate of digitisation and the sector in which it is operating. Traders also reacted negatively to Fitch Ratings' statement that the Reserve Bank's scheme to allow lenders to recast loans will extend uncertainty over the banking sector's asset quality. According to Fitch, the scheme could open a window for banks to build capital buffers while putting off full recognition of COVID-19 pandemic's impact on loan portfolios, but is reminiscent of a strategy adopted over 2010-2016 that delayed and exacerbated problems for banks. However, markets managed to cut most of losses in final hour of session, on the back of largely positive cues from global peers. Traders also found some solace with a private report that the Department of Promotion of Industry and Internal Trade (DPIIT) has proposed short- and-long-term measures to turn India into a manufacturing hub for auto components and air conditioning. Some respite also came amid private report stating that the Indian export sector is likely to witness a sharper recovery curve September-October onwards, which could be further strengthened by the holiday season in western countries in the following months. The third in a three-part series, Drip Capital's working paper says that improvements in the June export numbers are definitely early signs of recovery in the economy. Finally, the BSE Sensex lost 37.38 points or 0.10% to 38,369.63, while the CNX Nifty was down by 14.10 points or 0.12% to 11,308.40.

The US markets ended higher on Wednesday on reports that the US government has secured 100 million doses of Moderna's (MRNA) experimental COVID-19 vaccine in a deal valued at up to $1.525 billion. The strength on markets partly reflected a rebound by tech stocks, which have pulled back sharply in recent session. Big-name tech companies like Apple, Microsoft, and Amazon posted notable gains, partly offsetting the recent weakness. Shares of Tesla also moved sharply higher after the electric car maker said its board has approved and declared a five-for-one split of the company's common stock in the form of a stock dividend. On the economic data front, Consumer prices in the US increased by more than anticipated in the month of July, according to a report released by the Labor Department. The Labor Department said its consumer price index climbed by 0.6 percent in July, matching the increase seen in June. Street had expected consumer prices to rise by 0.3 percent. The stronger than expected consumer price growth was partly due to a continued spike in energy prices, which surged up by 2.5 percent in July after soaring by 5.1 percent in June. Gasoline prices continued to lead the way higher.

Crude oil futures ended higher on Wednesday after industry data showed that US inventories of crude fell more than street expected, raising hopes of a recovery in global oil demand. The Energy Information Administration reported that US crude inventories fell by 4.5 million barrels for the week ended August 7. That followed sizable declines in each of the previous two weeks. The American Petroleum Institute (API) reported late Tuesday that US crude stocks fell by 4 million barrels last week, beating expectations of draw of 2.9 million barrels. The API data also showed gasoline stockpiles declined by 1.3 million barrels, while distillate inventories fell by 2.9 million barrels. Crude oil futures for September rose $1.06 or 2.6 percent to settle at $42.67 a barrel on the New York Mercantile Exchange. October Brent crude gained 93 cents or 2.1 percent to settle at $45.43 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 factory output, measured on the basis of Index of Industrial Production (IIP), declined by 16.6 per cent in June 2020. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of June 2020 stood at 85.4, 106.9 and 156.2 respectively. Fast-rising covid cases and weakness in equity markets also dampened traders' mood. On the global front; sterling held above $1.30 on Wednesday, clinging on to recent gains on the back of dollar weakness, which outweighed the impact of a record drop in Britain's economic output. Finally, the rupee ended at 74.83, 5 paise weaker from its previous close of 74.78 on Tuesday.

The FIIs as per Wednesday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 16974.38 crore against gross selling of Rs 5203.15 crore, while in the debt segment, the gross purchase was of Rs 941.44 crore with gross sales of Rs 295.82 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.96 crore against gross selling of Rs 16.12 crore.

The US markets closed higher on Wednesday amid report that that the US government has secured 100 million doses of Moderna's (MRNA) experimental COVID-19 vaccine in a deal valued at up to $1.525 billion. Asian markets are trading in green on Thursday following a surge in the US markets overnight as tech stocks rallied. Indian markets ended lower on Wednesday as weak domestic factory output data and mixed global cues dampened investors' mood. Today, the start of session is likely to be optimistic tracking firm global cues. Investors will be looking ahead to the retail inflation data to be out later in the day. Traders will be getting encouragement with a private report that 70 per cent of all reported coronavirus cases in India have now recovered. The steepest rise in the recovery rate has been in the month of August, with the recovery rate gaining almost six percentage points in just 12 days. Some support will come with a private report that amid the economic fallout caused due to the coronavirus outbreak, the government may soon roll out another set of stimulus measures and Prime Minister Narendra Modi himself will unveil these steps. Traders may take note of report that Union minister Nitin Gadkari called for increased investment by international institutions and bodies in the Indian Highways and MSME sectors. There will be some buzz in the IT stocks with a report that the Trump administration has relaxed some rules for H-1B visas holders, allowing them to enter the United States if they are returning to the same jobs they had prior to the proclamation of the visa ban. Gold related stocks will be in focus with the Gems and Jewellery Export Promotion Council (GJEPC) report that the country's gem and jewellery exports contracted by 38.10 per cent in July to $1.35 billion (around Rs 10,185 crore) due to weak global demand on account of the COVID-19 pandemic. There will be some reaction in tea industry related stocks as the Consultative Committee of Plantation Associations (CCPA), the apex body of tea associations in India, has urged Union Commerce Minister Piyush Goyal not to reduce import duty on tea as any move in that direction will disturb the equilibrium of the industry. There will be some earnings announcements too to keep the markets buzzing.

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

Nifty Top volumes

• Wipro has completed the acquisition of 4C for 68 million euros. 
• APSEZ's board has given its in-principle approval for issuance of NCDs worth around Rs 3,000 crore in one or more tranches on private placement basis. 
• HDFC has raised Rs 10,000 crore equity capital by issuing 5,68,18,181 equity shares at an issue price of Rs 1,760 to qualified investors. 
• Coal India has sought 15 per cent distance-based freight concession from Indian Railways for transportation of domestic coal to customers.