Extending gains to a second straight day, Indian equity benchmarks ended the Wednesday's session with gains of over half percent each, supported by buying interest in realty, healthcare and auto shares. After making slightly positive start, key indices gained some traction, as traders took some support as Chief Economic Advisor Krishnamurthy Subramanian exuded confidence that the country would be back to a high growth path through reforms announced by the government, after overcoming the COVID-19 pandemic. Some support also came with a private report stated that consumer confidence index has shown a marginal uptick of 1.1 percentage points in September 2020. However, markets trimmed some of their gains in late morning session, as traders got anxious with the government data showing that contracting for the sixth straight month, India's exports slipped 12.66% to $22.7 billion in August, on account of decline in the shipments of petroleum, leather, engineering goods and gems and jewellery items. The trade deficit for August this year was estimated at $6.77 billion, against $4.8 billion in July 2020 and $13.86 billion in August 2019. But, benchmark indices regained their upward momentum in second half of the session, taking support from Foreign Secretary Harsh Vardhan Shringla's statement that India has received over $20 billion in FDI amid the coronavirus pandemic, showcasing the country as one of the most attractive destinations for investment globally.  Traders also took solace with RBI Governor Shaktikanta Das's statement that India has seen some stabilisation in economic activity in the ongoing fiscal's second quarter. He said that the economic recovery will be gradual, but some of the high-frequency indicators such as agriculture activity, manufacturing PMI, and private estimates of unemployment point to some stabilisation of economic activity in the second quarter. Finally, the BSE Sensex rose 258.50 points or 0.66% to 39,302.85, while the CNX Nifty was up by 82.75 points or 0.72% to 11,604.55.

The US markets ended mostly lower on Wednesday despite a dovish monetary policy announcement by the Fed, with the central bank leaving interest rates unchanged and signaling rates are likely to remain at near-zero levels for years to come. The Fed announced its widely expected decision to keep the target range for the federal funds rate at zero to 0.25 percent. The economic projections provided along with the announcement suggest most Fed officials expect interest rates to remain unchanged through at least 2023. The central bank said it expects rates to remain at current levels until labor market conditions reach levels consistent with maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. The projections from Fed officials suggest consumer price inflation will remain below 2.0 percent until at least 2023. The Fed's latest estimates point to a 3.7 percent contraction in GDP in 2020, reflecting an improvement from the 6.5 percent plunge forecast in June. On the economic data front, a report released by the Commerce Department showed a modest increase in US business inventories in the month of July. The Commerce Department said business inventories inched up by 0.1 percent in July after slumping by 1.1 percent in June. The uptick in inventories matched street estimates. The modest rebound in business inventories came as retail inventories jumped by 1.2 percent in July after tumbling by 2.7 percent in the previous month. On the other hand, the report showed wholesale and manufacturing inventories fell by 0.3 percent and 0.5 percent, respectively. The Commerce Department also said business sales surged up by 3.2 percent in July after soaring by 8.6 percent in June.

Crude oil futures settled higher on Wednesday, extending gains from the previous session, after US government data that showed an unexpectedly large weekly drop in US crude inventories. The Energy Information Administration (EIA) has said that US crude inventories fell by 4.4 million barrels for the week ended September 11. The EIA also reported that crude stocks at the Cushing, Okla., storage hub edged down by about 100,000 barrels for the week. A sharp drop in US offshore output due to the impact of Hurricane Sally, which made landfall near Gulf Shores, further supported oil prices. Crude oil futures for October rose $1.88 or 4.9 percent to settle at $40.16 a barrel on the New York Mercantile Exchange. November Brent crude surged $1.69 or 4.2 percent to settle at $42.22 a barrel on London's Intercontinental Exchange.

Indian rupee ended stronger against dollar on Wednesday due to fresh selling of the American currency by banks and exporters. Sentiments were optimistic as Reserve Bank of India (RBI) has proposed allowing foreign portfolio investors (FPIs) to undertake exchange-traded rupee Interest Rate Derivatives (IRD) transactions subject to an overall ceiling of Rs 5,000 crore. The proposed Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 are aimed at encouraging higher non-resident participation, enhance the role of domestic market makers in the offshore market, improve transparency, and achieve better regulatory oversight. However, upside remained capped as contracting for the sixth straight month, India's exports slipped 12.66 per cent to $22.7 billion in August, on account of decline in the shipments of petroleum, leather, engineering goods and gems and jewellery items. On the global front; pound held within striking distance of a two-month low on Wednesday before a Bank of England decision on Thursday against the backdrop of a darkening outlook for the economy. Finally, the rupee ended at 73.52, 12 paise stronger from its previous close of 73.64 on Tuesday.

The FIIs as per Wednesday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 6158.47 crore against gross selling of Rs 4303.91 crore, while in the debt segment, the gross purchase was of Rs 1395.83 crore with gross sales of Rs 518.82 crore. Besides, in the hybrid segment, the gross buying was of Rs 19.55 crore against gross selling of Rs 29.07 crore.

The US markets ended mostly lower on Wednesday as Fed Chairman Jerome Powell said the pace of the ongoing economic recovery is expected to slow. Asian markets are trading mostly in red on Thursday after the US Federal Reserve's policymaking committee indicated the overnight rate could stay close to zero for years to reach its 2 percent inflation target. Indian markets ended higher Wednesday led by gains in pharma, auto and realty stocks amid strong global cues. Today, the markets are likely to make negative start following weakness in the global peers. Traders will be concerned as the Organisation for Economic Co-operation and Development (OECD) in its Interim Economic Outlook report forecast a deeper contraction of 10.2% for India in the current fiscal, surpassing its June estimate of -7.3% in the event of a second wave of infections. Market participants will be anxious with report that total tax collection of the Centre, including advance tax collection for the second quarter, fell 22.5% to Rs 2,53,532.3 crore till September 15 of the current fiscal as compared to the year-ago period. Also, showing no signs of a relief, India has recorded 97,859 Covid-19 cases in just 24 hours, taking its tally past the 5.1-million mark. With this, India is rapidly nearing the US tally of 6.8 million. Though, some support may come later in the day with report that the government is in the process of bringing out a strategy paper on boosting industrial growth which will be a road map for all businesses in the country. There will be some buzz in the sugar stocks with report that the government has extended the deadline for exporting sugar from existing stocks by three months to December to help industry take advantage of the global supply disruption because of the pandemic, and clear cane dues of farmers. Aviation stocks will be in focus with DGCA data showing that passenger load factor crossed 60 per cent in August for the first time since the resumption of domestic flights in May this year. Industry-wise load factor or seat occupancy was 63.2 per cent in August. There will be some reaction in insurance industry's stocks with a private report that the lockdown imposed by the government to contain the spread of the coronavirus in the second fortnight of March resulted in the life insurance industry losing around 4 million policies and premiums to the tune of Rs 45,000 crore. Meanwhile, Happiest Minds is set to make its debut on the bourses. The issue, which was sold between September 7 and September 9 in the price band of Rs 165-166, was subscribed 151 times.

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

Nifty Top volumes

• Infosys has been selected by Essential Utilities as a strategic partner to drive its digital transformation. 
• SBI is going to make OTP-based cash withdrawal facility operational round the clock at its ATMs for transactions of Rs 10,000 and above. 
• M&M has launched contactless option for accessories, extended warranty and workshop related payments for its entire range of vehicles. 
• Volvo Car India has partnered with HDFC Bank to launch Volvo Car Financial Services to enable buyers get easy finance for its vehicles.