Indian equity benchmarks were struggling with extreme volatility but ended Wednesday's session on optimistic note with gains of over half percent, amid buying across sectors led by financial shares, as hopes of economic reopening and a generally improved global risk sentiment outweighed concerns over the surge in domestic COVID-19 infections. Domestic bourses made positive start and stayed in green for whole day, tracking gains in Asian equities. Traders took encouragement with the Department for Promotion of Industry and Internal Trade' (DPIIT) data showing that Cayman Islands has emerged as the fifth largest investor in India, with foreign direct investment (FDI) from the nation increasing over three-fold to $3.7 billion in 2019-20. Buying further crept in as the Ministry of Corporate Affairs (MCA) amended the Companies (Share Capital and Debentures) Rules, 2014, to allow startups to issue sweat equity shares not exceeding 50% of its paid-up capital up for a decade after the registration of the firm. However, volatility struck bourses in afternoon session, as traders got wary with private report stating that consumer behaviour in India is radically changing due to COVID-19 with 60 percent of buyers in the country believing that the pandemic would alter the way they shop. However, markets gained traction in final hour of trade, as the sentiment got a boost after Fitch Ratings said that after a contraction in the current financial year, India's economy is forecast to bounce back with a sharp growth rate of 9.5 percent next year, provided it avoids further deterioration in financial sector health. Finally, the BSE Sensex gained 290.36 points or 0.86% to 34,247.05, while the CNX Nifty was up by 69.50 points or 0.69% to 10,116.15.

The US markets ended mostly lower on Wednesday even though the Federal Reserve pledged to hold interest rates unchanged at near zero through 2022, while keeping up at least its current pace of bond buying to support credit markets through the pandemic. The Fed announced its widely expected decision to maintain the target range for the federal funds rate at zero to 0.25 percent. The accompanying statement also reiterated that the Fed expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. Expectations that rates will remain at record lows come as the Fed projects real GDP to nosedive by 6.5 percent in 2020, as the ongoing public health crisis weighs heavily on economic activity. However, the Fed's projections call for real GDP to rebound by 5.0 percent in 2021 followed by a 3.5 percent jump in 2022. The unemployment rate is expected to drop to 9.3 percent by the end of this year from the current 13.3 percent before pulling back further to 6.5 percent in 2021 and 5.5 percent the next year. On the economic data front, the Labor Department released a report showing a modest decrease in consumer prices in the month of May. The Labor Department said its consumer price index edged down by 0.1 percent in May after slumping by 0.8 percent in April. Street had expected consumer prices to come in unchanged. The dip in consumer prices came amid a continued decrease in energy prices, which tumbled by 1.8 percent in May after plunging by 10.1 percent in the previous month. Prices for gasoline and fuel oil showed notable declines.

Crude oil futures ended higher on Wednesday on account of weakness in the dollar that followed the Federal Reserve's announcement that it plans to keep interest rates at near zero through 2022. The Fed said that it would do what it takes to support the economy-easing worries about energy demand. Further, oil prices rose despite data showing an increase in US crude inventories in the week ended June 5. The Energy Information Administration (EIA) showed US stockpiles increased by 5.7 million barrels in the week ended June 5 to 538.1 million barrels. Street was expecting a draw of more than 1.5 million barrels in the week. The American Petroleum Institute on Tuesday had reported a climb of 8.4 million barrels. Crude oil futures for July rose 66 cents or 1.7 percent to settle at $39.60 a barrel on the New York Mercantile Exchange. August Brent crude gained 55 cents or 1.3 percent to settle at $41.73 a barrel on London's Intercontinental Exchange.

Indian rupee has erased most of the day's gains and ended marginally higher against dollar on Wednesday, amid volatile trade seen in the domestic equity market. Traders took some support with the Department for Promotion of Industry and Internal Trade' (DPIIT) data showing that Cayman Islands has emerged as the fifth largest investor in India, with foreign direct investment (FDI) from the nation increasing over three-fold to $3.7 billion in 2019-20. Dollar losing sheen against some other currencies overseas also supported the forex sentiment. On the global front, dollar fell against most currencies on Wednesday amid some speculation the U.S. Federal Reserve could take steps to curb a recent rise in bond yields in a policy decision later in the day. Finally, the rupee ended at 75.59, 2 paise stronger from its previous close of 75.61 on Tuesday.

The FIIs as per Wednesday'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 6465.58 crore against gross selling of Rs 5988.88 crore, while in the debt segment, the gross purchase was of Rs 371.90 crore with gross sales of Rs 871.83 crore. Besides, in the hybrid segment, the gross buying was of Rs 11.27 crore against gross selling of Rs 7.73 crore.

The US markets ended mostly lower on Wednesday after the Fed indicated interest rates are likely to remain at current near-zero levels through 2022. Asian markets are trading mostly in red on Thursday after the dovish commentary from the US Federal Reserve. Indian markets ended notably higher on Wednesday, after Fitch Ratings said that Indian economy will likely bounce back with a sharp growth rate of 9.5 percent in next fiscal. Today, the markets are likely to make pessimistic start tracking weakness in the global markets. Traders will be concerned with rising coronavirus cases in India. The total number of coronavirus cases in the country jumped to 2,87,155, while 8,107 people have died from the disease so far, according to Worldometer. Besides, the Organization for Economic Co-operation and Development (OECD) has projected that India's economy will contract 7.3 per cent in the current fiscal year if there is a second wave of the coronavirus (Covid-19) later this year. This is so far the steepest contraction that any agency has predicted for the country. There will be some cautiousness a private report that India consumer price inflation is likely to have moderated to a six-month low in May on a softer rise in food prices as supply disruptions eased after businesses reopened from the coronavirus lockdown in many parts of the country. Though, some respite may come later in the day with report that the Finance Ministry released the third monthly installment of Rs 6,195 crore to 14 states as of Post Devolution Revenue Deficit Grant to provide additional resources during COVID-19 crisis. Some support may also come as global rating agency S&P Global Ratings affirmed BBB- long-term and A-3 short-term unsolicited foreign and local currency sovereign credit ratings on India, dispelling fears that a rating downgrade is on the cards. The agency said the outlook on the long-term rating is stable. Meanwhile, the government has for the third time extended the validity of e-way bills generated on or before March 24 till June 30. There will be some buzz in the gas sector stocks with a report by the International Energy Agency (IEA) on the gas sector for the year 2020 stating that India is set to emerge as one of the primary drivers of growth in gas demand in Asia, after a temporary slowdown in 2020. Telecom stocks will be in focus as the Supreme Court will hear the AGR matter later in the day.

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

Nifty Top volumes

• Wipro has expanded its global strategic relationship with Amazon Web Services in the area of DevOps. 
• Bharti Airtel's wholly owned subsidiary -- Bharti International (Singapore) has acquired an additional 6.3 percent stake in Bangladesh's telecom operator Robi Axiata. 
• Cipla has signed agreements to acquire shares representing 21.85% stake in GoApptiv on a fully diluted basis. 
• Hero MotoCorp has reported 21.62% fall in its consolidated net profit attributable to owners of the company of Rs 604.63 crore for Q4FY20 as compared to Rs 771.44 crore for Q4FY19.