Extending gains for the second consecutive session, Indian equity benchmarks ended Wednesday's session near day's high point with gains of over two percent, on sustained buying, with Sensex and Nifty closing above their crucial 30,800 and 9,050 levels, respectively. Domestic bourses were trading on a positive note since the beginning, as traders got encouragement with report that the government has decided to further revise the criteria for medium units by enhancing the investment and turnover limits to up to Rs 50 crore and Rs 200 crore respectively. Traders took a note of Fitch Ratings' statement that support measures announced by the government for non-banking finance companies (NBFCs) seek to ease borrower strain and boost funding conditions for NBFIs, but successful implementation will be the key. Domestic indices extended their upside in last hour of trade, tracking gains in Healthcare, Consumer Durables and Oil & Gas stocks despite weak cues from global markets. Traders paid no heed towards Crisil research wing's report stating that eight states most affected by the COVID-19 pandemic account for over 60 per cent of the Gross Domestic Product (GDP) and the extended restrictions will slam the economy harder. The eight states, which include Maharashtra, Gujarat and Tamil Nadu, among others also account for 58 per cent of the employment. The share of gross state value added (GSVA) from these states is 64 per cent in agriculture, 63 per cent in industry and 53 per cent in services. Traders even overlooked the Federation of Indian Export Organisations' (FIEO) statement that the export from the country is expected to fall by 20 per cent in the current fiscal in the wake of the coronavirus pandemic. Finally, the BSE Sensex gained 622.44 points or 2.06% to 30,818.61, while the CNX Nifty was up by 187.45 points or 2.11% to 9,066.55.

The US markets ended higher on Wednesday on continued optimism about an economic recovery as states begin to reopen following the coronavirus-induced lockdowns. Early indications suggest the states that have reopened have not seen a spike in coronavirus cases, which has led to hopes the economy may rebound more quickly than many street predict. Positive sentiment was also generated in reaction to earnings news from Lowe's (LOW), with the home improvement retailer reporting first quarter results that exceeded street estimates on both the top and bottom lines. At the same time, the minutes of the Federal Reserve's latest monetary policy meeting highlighted concerns about the extraordinary amount of uncertainty and considerable risks to economic activity created by the coronavirus pandemic. The minutes said participants at the late-April meeting discussed several alternative scenarios with regard to the behavior of economic activity in the medium term that all seemed about equally likely. The Fed said these scenarios differed in the assumed length of the pandemic and the consequent economic disruptions. Meanwhile, traders largely shrugged off a report raising doubts about Moderna's (MRNA) potential coronavirus vaccine.

Crude oil futures ended higher on Wednesday, extending previous sessions' gains, on the back of a second-straight weekly decline in domestic crude supplies and a drop in stocks at the Cushing, Okla. storage hub. The Energy Information Administration (EIA) reported that US crude inventories fell by 5 million barrels for the week ended May 15. That compared with a forecast by S&P Global Platts for an average increase of 2.4 million barrels. The American Petroleum Institute on Tuesday reported a decline of 4.8 million barrels. The EIA data showed crude stocks at the Cushing storage hub fell by about 5.5 million barrels for the week, easing concerns over tightening storage space. Crude oil futures for July rose $1.53 or 4.8 percent to settle at $33.49 a barrel on the New York Mercantile Exchange. July Brent crude surged $1.10 or 3.2 percent to settle at $35.75 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 amid concerns over the impact of coronavirus outbreak on the domestic as well as global economy. Some pessimism also came as the Crisil research wing's report stating that eight states most affected by the COVID-19 pandemic account for over 60 per cent of the Gross Domestic Product (GDP) and the extended restrictions will slam the economy harder. However, gains in domestic equity markets provided some support to the rupee, keeping the downside in check. On the global front, euro edged higher on Wednesday as a Franco-German proposal for a common fund that could move Europe closer to a fiscal union underpinned demand for the common currency, while some risk aversion in currency markets also boosted the Swiss franc. Finally, the rupee ended at 75.80, 14 paise weaker from its previous close of 75.66 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 5085.67 crore against gross selling of Rs 6419.83 crore, while in the debt segment, the gross purchase was of Rs 673.79 crore with gross sales of Rs 1557.48 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.71 crore against gross selling of Rs 5.65 crore.

The US markets ended higher on Wednesday amid optimism about an economic recovery as states begin to reopen following the coronavirus-induced lockdowns. Asian markets are trading mixed on Thursday as China's benchmark lending rate was left unchanged. Indian markets ended higher for a second straight session on Wednesday, with rate-sensitive financials, auto and realty stocks leading the surge despite rising coronavirus cases in the country. Today, the markets are likely to make flat-to-negative start amid mixed Asian cues coupled with rising coronavirus cases in India. With over 5,000 cases in a single day, the total coronavirus count in the country has risen to 112,028, according to Worldometer data. Traders will be concerned as domestic rating agency Icra warned of a deep recession as it drastically lowered FY21 growth forecast for India to minus 5 percent, citing the very modest fiscal support, extension of the nationwide lockdown and looming labour shortage. The agency also sharply revised downwards the growth contraction in Q1 to 25 percent as against the previous forecast of 16-20 percent and to minus 2.1 percent in Q2 from 2.1 percent growth previously, which implies a recession. Traders will also react to the Reserve Bank of India's (RBI) data showing that India's overseas direct investment (ODI) in April dipped 62 per cent to $976.14 million. Some support may come later in the day as the union cabinet cleared Rs 3 lakh crore micro, small and medium enterprise (MSME) funding scheme to mitigate the economic distress being faced by the small businesses in the light of the COVID-19 pandemic. Traders may take note of the RBI's data showing that bank credit rose 6.52 percent year-on-year to Rs 102.52 lakh crore, while deposits grew 10.64 percent to Rs 138.50 lakh crore in the fortnight ended May 8. There will be some buzz in the aviation stocks with report that India will resume domestic flights in a calibrated manner from May 25 as passengers follow prevention guidelines for coronavirus. Coal stocks will be in focus as the government approved a methodology for commercial mining of coal on revenue sharing basis. There will be some reaction in insurance stocks with report that companies across sectors have been struggling to work out ways to cut costs to counter the impact of coronavirus (COVID-19). Life insurance companies for one are hoping to save on costs by reducing branch presence.

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

Nifty Top volumes

• Dr. Reddy's Laboratories has received the EIR from the USFDA, for its Formulations Manufacturing Plant -3 at Bachupally, Hyderabad, indicating closure of the audit. 
• Infosys is partnering with the State of Rhode Island in launching a privacy-first contact tracing solution to help Rhode Islanders. 
• Tata Steel has raised Rs 1,000 crore and allotted 10,000 - 8.25% Unsecured, Rated, Listed, Redeemable, NCDs of face value Rs 10 lakh each to identified investor. 
• Reliance Industries has raised Rs 3,600 crore and allotted 36,000 Unsecured Redeemable NCDs of the face value of Rs 10 lakh each.