Bringing up fifth-day of gains, Indian equity benchmarks finished Tuesday's session on a higher note, driven by strong buying across Realty and Banking stocks amid positive cues from global markets. After opening on a tepid note, key indices gained traction and traded in fine fettle, as investors took encouragement with the India Meteorological Department's (IMD) statement that the Southwest monsoon arrived in India on June 01 with heavy rainfall over several places in Kerala, marking the commencement of the four-month long rainfall season. It also upgraded its forecast for 2020 rainfall to 102% of the Long Period Average (LPA), from the 100% in April. The forecast is with a model error of plus and minus of 4%. Sentiments also remained up-beat as the Centre rolled out Rs 20,000 crore distressed asset fund to extend support to promoters of distress units, in order to support stressed micro, small and medium enterprises (MSMEs). Buying got intensified in the late afternoon session, as sentiments remained buoyant with Prime Minister Narendra Modi's statement that India will definitely get its economic growth back as the government continues to pursue various reforms. He said the government has taken tough steps to fight the coronavirus pandemic and has also taken care of the economy. Market participants paid no heed towards report that Moody's has downgraded the Government of India's foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2, saying there will be challenges in implementation of policies to mitigate risks of a sustained period of low growth and deteriorating fiscal position. Finally, the BSE Sensex gained 522.01 points or 1.57% to 33,825.53, while the CNX Nifty was up by 152.95 points or 1.56% to 9,979.10.

The US markets ended higher on Tuesday, extending the upward move seen in the previous session, amid optimism about an economy recovery as businesses reopen following the coronavirus-induced shutdown. Traders have largely ignored the mass protests across the country in response to the death of George Floyd at the hands of Minneapolis police officers. The protests have turned violent in many instances, but traders appear to believe that the unrest will be curtailed before having any meaningful impact on the economy. Meanwhile, President Donald Trump reiterated threats to deploy military troops across cities facing protests if governors and local officials prove unable to contain violent demonstrations. Energy stocks helped lead the markets higher, benefiting from a sharp increase by the price of crude oil.  Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 4.1 percent, the NYSE Arca Oil Index spiked by 3.3 percent and the NYSE Arca Natural Gas Index shot up by 3.1 percent. Substantial strength was also visible among steel stocks, as reflected by the 3.2 percent jump by the NYSE Arca Steel Index. The index ended the session at its best closing level in nearly three months.

Crude oil futures settled sharply higher on Tuesday, with West Texas Intermediate (WTI) and Brent crude both marking the highest settlements for front-month contracts since March 6, supported by reports that major crude producers may agree to extend output cuts scheduled to taper at the end of June. The Organization of the Petroleum Exporting Countries (OPEC) and, notably, major producer Russia, part of a group known as OPEC+, are now expected to extend their output cuts of 9.7 million barrels per day. Further, the crude market also has been bolstered by hope that business reopening across the world from the COVID-19 pandemic could help to drive demand for oil and other crude byproducts. Crude oil futures for July rose $1.37 or 3.9 percent to settle at $36.81 a barrel on the New York Mercantile Exchange. August Brent crude surged $1.25 or 3.3 percent to settle at $ 39.57 a barrel on London's Intercontinental Exchange.

Rising for the third consecutive day, Indian rupee ended higher against dollar on Tuesday, on continued selling of the American currency by exporters and banks. Sentiments remained buoyant with the India Meteorological Department's (IMD) statement that the Southwest monsoon arrived in India on June 01 with heavy rainfall over several places in Kerala, marking the commencement of the four-month long rainfall season. The rupee also derived its strength from strong gains in the local equity markets as well as dollar's weakness against some currencies overseas. Traders overlooked report that Moody's has downgraded the Government of India's foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2. On the global front, pound rose to a four-week high against the dollar on Monday, as a risk-on mood in global markets prompted by hopes for an economic recovery caused the safe-haven dollar to weaken. Finally, the rupee ended at 75.36, 18 paise weaker from its previous close of 75.54 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 13182.18 crore against gross selling of Rs 6249.09 crore, while in the debt segment, the gross purchase was of Rs 1402.18 crore with gross sales of Rs 1229.06 crore. Besides, in the hybrid segment, the gross buying was of Rs 18.70 crore against gross selling of Rs 18.06 crore.

The US markets ended higher on Tuesday amid optimism about an economy recovery as businesses reopen following the coronavirus-induced shutdown. Asian markets are trading in green on Wednesday following rally on Wall Street overnight. Indian markets ended higher for fifth straight day on Tuesday amid optimism over gradual easing of the lockdown curbs coupled with positive cues from global markets. Today, the markets are likely to make positive start tracking firm global cues. Investors will be eyeing the PMI Services data for May to be announced later in the day. Traders will be getting some encouragement as Prime Minister Narendra Modi assured India Inc that growth in the economy will return soon as the government continues to pursue multiple reforms. He added that with unlock phase-1 India has already begun getting its growth back. Some support will also come as the World Bank urged countries to go for comprehensive policies to boost long-term growth along with short term measures to address health emergencies and secure core public services in the wake of the coronavirus crisis, amid indications that 60 million people could be pushed into extreme poverty in 2020. Though, there may be some cautiousness with the data compiled by Worldometer showing that India has seen a surge of over 8,500 cases in a day, taking its total number of coronavirus cases to 207,191. The country's death toll now stands at 5,829. Traders may be concerned with Former finance secretary Subhash Chandra Garg's statement that the Indian economy will shrink by 10% or Rs 20 lakh crore in the ongoing fiscal, the first contraction in over 40 years, due to a faulty COVID lockdown. There will be some buzz in the sugar stocks with industry body ISMA's statement that with further relaxations in COVID-19 lockdown rules, sugar demand in India has started picking up and will further improve with opening of hotels and restaurants. NBFCs stocks will be in focus with ICRA's report that the extension of moratorium on loan repayments till August by the Reserve Bank of India will impact non-banking financial companies' (NBFCs) collections and affect their liquidity conditions. There will be some reaction in steel sector stocks with India Ratings' (IndRa) statement that as construction activities were impacted due to the extended lockdown, onset of monsoon and mass migration of labourers, operating profit or EBITDA of steel producers is expected to decline by 20-30 percent in the current fiscal due to lower demand and price realisation.

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

Nifty Top volumes

• NTPC has incorporated a Joint Venture Company with East Delhi Municipal Corporation with equity participation of 74:26 respectively. 
• Bajaj Auto has reported 70 per cent decline in total sales to 127128 units in May as against 419235 in the same month last year. 
• HCL Technologies and Temenos have signed exclusive strategic agreement for non-financial services enterprises. 
• JSW Steel has reported crude steel production at 12.48 lakh tonnes for May 2020, clocking an average capacity utilisation of around 83% for the month.