Indian equity benchmarks opened higher and built on the rally throughout the day to close near intraday highs on Tuesday, amid heavy buying in realty and banking stocks. Indian shares closed up for a second straight day, with Sensex and Nifty moved above their important psychological levels of 38,500 and 11,350 respectively. Market participants got comfort as government relaxed norms for Partial Credit Guarantee Scheme (PCGS) for purchase of bonds and commercial papers by public sector banks and extended its period by three months, with a view to provide additional liquidity to crisis-ridden NBFCs and housing finance companies (HFCs). Sentiments remained positive, amid report that Finance Minister Nirmala Sitharaman held a virtual bilateral meeting with United Arab Emirates (UAE) Minister of State for Financial Affairs Obaid Al Tayer and urged the Middle Eastern nation to participate in India's ambitious Rs 111 lakh crore National Infrastructure Pipeline. About 7,000 projects have been identified under the National Infrastructure Pipeline (NIP) with projected investment of Rs 111 lakh crore during 2020-25. Domestic markets staged a strong up move in final hour of trade, taking support from private report that consumer sentiment has started to get a little better, even though the COVID-19 pandemic has continued to worsen. It also said cautious living is emerging as the new theme, where consumers beginning to feel that it is time that they need to resume their activities albeit with a lot of caution. Traders overlooked State Bank of India's (SBI) research report Ecowrap stated that India's Gross Domestic Product (GDP) is likely to contract by 16.5 percent in Q1 (April-June) of 2020-21, as the current Covid-19 pandemic is spreading at a much faster rate after the opening up of the economy. Meanwhile, the Government of India (GOI) is going to sell (re-issue) three dated securities for a notified amount of Rs 30,000 crore. Finally, the BSE Sensex gained 477.54 points or 1.26% to 38,528.32, while the CNX Nifty was up by 138.25 points or 1.23% to 11,385.35.

The US markets ended mostly higher on Tuesday with the S&P 500 index notching its first record close since February 19 and marking the quickest recovery from bear-market territory in its history. Treasury Secretary Steven Mnuchin said the economy is doing better as more businesses reopen, but that President Donald Trump wants Congress to do more. He wants us to provide money for kids and jobs, and a second round of the PPP and direct payments are a clear part of that, he said of the Treasury's hallmark Paycheck Protection Program to help small businesses cover payroll during the pandemic. Meanwhile, Senate Republicans were expected to soon introduce a skinny coronavirus relief plan that also includes $10 billion for the US Postal Service, which now sits at the heart a controversy over mail-in voting for the general elections on November 3. It is unclear if the new proposal will help break an impasse between the two political parties after $600 a week in extra unemployment benefits expired at the end of July. The Republican proposal includes a $300-a-week enhanced unemployment benefit, money for small-business aid, and protection for employers against lawsuits stemming from COVID-19 infections. Several Democratic state attorneys general also said they plan to sue the Trump administration to thwart any changes to the U.S. Postal Service that could hamper mail-in voting for the upcoming election. Postmaster General Louis DeJoy pledged that the mail service is ready today to handle all of the mail-in ballots it receives in November.

Crude oil futures ended unchanged on Tuesday as traders looked ahead to data on US crude supplies and a meeting by an OPEC+ panel charged with monitoring the effect of production cuts by major producers. Besides, fresh geopolitical concerns and a spike in coronavirus infections in economies newly emerging from weeks of lockdown have added to the downside risks to the oil demand outlook. Crude oil futures for September closed unchanged at $42.89 a barrel on the New York Mercantile Exchange. October Brent crude gained 9 cents or 0.2 percent to settle at $45.56 a barrel on London's Intercontinental Exchange.

Rising for second straight session, Indian rupee strengthened substantially against dollar on Tuesday, owing to dollar sale by exporters and banks. Sustained foreign fund inflow and strong gains in equity market supported the rupee. Traders shrugged off State Bank of India's (SBI) research report Ecowrap witch stated that India's Gross Domestic Product (GDP) is likely to contract by 16.5 percent in Q1 (April-June) of 2020-21, as the current Covid-19 pandemic is spreading at a much faster rate after the opening up of the economy. On the global front; pound rose on Tuesday, approaching a five-month high, driven by a weaker dollar. The dollar index hit new lows on Tuesday, facing the triple woes of diminishing yields, weak U.S. economic data and a lessening of demand for safe havens. Finally, the rupee ended at 74.76, 12 paise stronger from its previous close of 74.88 on Monday.

The FIIs as per Tuesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 15788.48 crore against gross selling of Rs 3474.41 crore, while in the debt segment, the gross purchase was of Rs 772.10 crore with gross sales of Rs 1062.81 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.68 crore against gross selling of Rs 1.31 crore.

The US markets ended mostly in green on Tuesday as trillions of dollars in stimulus aid from the Federal Reserve and Congress helped prop up an American economy gripped by recession. Asian markets are trading mostly higher on Wednesday following overnight gains on Wall Street. Indian markets ended higher on Tuesday led by gains in financials, metal and auto stocks, following positive trends in Asian peers. Today, the start of session is likely to be positive tracking gains in global peers. Some support will come with Nasscom's report that driving utilisation of data and artificial intelligence (AI) could play a crucial role in realising India's 2025 vision of inclusive development and deliver over $500 billion in value to the economy. According to the industry body, this segment could account for 10 per cent of the country's GDP by 2025. The report added that it would be even more impactful as India's economy restarts after the Covid-19 lockdown. Traders may take note that the Reserve Bank unveiled the framework for setting up umbrella entities for operating pan-India retail payments systems and invited applications from eligible companies by February 26, 2021. However, rising coronavirus cases may impact the sentiments in the markets. India has recorded over 65,000 coronavirus cases in the past 24 hours, taking its total to 2,766,626. With 1,089 fatalities reported on Tuesday, the country's death toll surged to 53,014. Also, some cautiousness may come with Moody's Investors Service's statement that US-India trade negotiations will continue to be challenging and are likely to get delayed due to the Covid-19 pandemic. Auto stocks will be in focus as international rating agency Fitch has forecasted over 20 percent decline in domestic automobile demand during this fiscal year as the industry faces several challenges and not just pandemic driven issues. Banking stocks will be in limelight with Care ratings' report that banks' credit growth is expected to remain slower in the near term as they are cherry picking their credit portfolios with caution. There will be some reaction in agriculture related stocks as the agriculture ministry said India's farm exports rose 23.24 percent in value terms to Rs 25,552.7 crore during March-June period amidst the COVID-19 pandemic.

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

Nifty Top volumes

• TVS Motor Company has introduced the technologically advanced, feature packed 2020 version of TVS Apache RTR 200 4V in Nepal. 
• Zee Entertainment Enterprises has posted a consolidated net profit of Rs 29.28 crore for Q1FY21, down 94.5% from a year ago. 
• Hero MotoCorp is all set to bring the exciting cricketing action back with Hero Caribbean Premier League starting from August 18 to September 10, 2020. 
• Kotak Mahindra Bank has successfully implemented CRMNEXT, the leading enterprise solution for banks and financial services.