Indian equity benchmarks recovered from the day's low but still closed in the red for the second straight day on Wednesday, amid concerns over India-China tensions and intense selloff in global markets. Domestic equities opened on a negative note and stayed in red terrain for whole day, as traders were concerned with report that the clinical trials for the Covid-19 vaccine candidate developed by the University of Oxford, which was expected to start at PGIMER in Chandigarh, have been delayed by at least a week over safety approvals. Trading sentiments remain dampened as Fitch Ratings has sharply lowered its forecast for India's gross domestic product (GDP) growth for the current fiscal year (FY21) to (-) 10.5 percent from (-) 5 percent estimated earlier. It pointed out that the continued spread of the virus and the imposition of sporadic shutdowns across the country depress sentiment and disrupts economic activity. Adding to the pessimism, the private report said that India is witnessing the weakest hiring sentiment in 15 years with just 3 percent companies planning to add staff in the next three months. However, domestic benchmark indices managed to recoup most of the losses towards the end of the trading session, as some optimism remained among traders with a private report that the Indian economy is expected to climb from a deeper trough in the calendar year 2020 (CY20) and see a stronger rebound in the year 2021. Markets participants also took a note of Reserve Bank of India (RBI) board member Manish Sabharwal's statement that India needs more banks for sustaining high growth and doubling the credit-to-GDP ratio to 100 per cent. He also said the country needs immediate reforms in banking, compliance, labour laws and education because hope is not a strategy. Finally, the BSE Sensex fell 171.43 points or 0.45% to 38,193.92, while the CNX Nifty was down by 39.35 points or 0.35% to 11,278.00.

The US markets ended higher on Wednesday, regaining ground following the sell-off seen over the three previous sessions. The rebound on markets came as some traders looked to pick up stocks at relatively reduced levels. Technology stocks showed a substantial rebound on the day after leading the markets lower over the past few sessions. Tech giants Microsoft, Apple, and Amazon posted standout gains, partly offsetting their recent losses. With Microsoft helping to lead the way higher, software stocks showed a notable move to the upside on the day. Considerable strength was also visible among semiconductor stocks, as reflected by the 2.9 percent spike by the Philadelphia Semiconductor Index. Democratic presidential nominee Joe Biden rolled out his Made in America tax policy, while campaigning in Michigan, which includes a proposed new offshoring penalty and a minimum 21% corporate tax on all foreign earnings, but a 10% tax credit for any companies making investments to create US jobs, such as by revitalizing existing facilities that have been closed. Economic data showed that US employers posted more job openings in July but hired fewer workers than in June, the Labor Department reported, as early-summer optimism about reopening businesses faded. There were 6.6 million job openings posted, not far off the pre-pandemic average.

Crude oil futures ended higher on Wednesday, rebounding strongly after suffering a terrible setback a session earlier, amid hopes the US inventory data for last week will show a drop in stockpiles. According to estimates, US crude oil production will likely drop by 870,000 barrels per day to 11.38 million barrels per day this year.  There is expects that the EIA data to show a decline of about 500,000 barrels in crude stockpiles for the week ended September 4. A survey by S&P Global Platts expects gasoline supplies to have dropped by about 2.5 million barrels and distillates stockpile to have risen by about 300,000 barrels last week. Crude oil futures for October surged $1.29 or 3.5 percent to settle at $38.05 a barrel on the New York Mercantile Exchange. November Brent crude gained $1.01 or 2.5 percent to settle at $40.79 a barrel on London's Intercontinental Exchange.

Erasing all of its initial losses, Indian Rupee ended marginally higher on Wednesday on fresh selling of dollar by bankers and exporters. Traders took some support with a private report that Indian economy is expected to climb from a deeper trough in the calendar year 2020 (CY20) and see a stronger rebound in the year 2021. Markets participants also took a note of Reserve Bank of India (RBI) board member Manish Sabharwal's statement that India needs more banks for sustaining high growth and doubling the credit-to-GDP ratio to 100 percent. He also said the country needs immediate reforms in banking, compliance, labour laws and education because hope is not a strategy. However, weakness in the domestic equity market and fresh border tensions between India and China restricted the local unit's further gains. On the global front, pound fell to its lowest level in six weeks against the dollar on Wednesday as new legislation by the British government on the country's post-Brexit plans stoked fears of a derailment of trade talks with the European Union. Finally, the rupee ended at 73.55, 5 paise stronger from its previous close of 73.60 on Tuesday.

The FIIs as per Wednesday's data were net seller in equity, while they were net buyer in debt segment. In equity segment, the gross buying was of Rs 4598.67 crore against gross selling of Rs 4755.81 crore, while in the debt segment, the gross purchase was of Rs 1179.61crore with gross sales of Rs 1015.51 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.63 crore against gross selling of Rs 32.32 crore.

The US markets ended higher on Wednesday as investors jumped back in to take advantage of the pullback in technology-related stocks. Asian markets are trading mostly in green tracking overnight gains in US peers. Indian markets ended lower Wednesday dragged by selling in banking and IT stocks amid negative global cues. Today, the markets are likely to get flat-to-positive start tracking gains in global peers. Traders will be taking encouragement with Finance Minister Nirmala Sitharaman's statement that banks are going to be the catalysts for economic revival. Some support will some with report that the government is planning to save about Rs 35,000 crore to help manage the fiscal load put by the production-linked incentive (PLI) and phased manufacturing program (PMP) schemes, its initiatives to attract investment into the country. Traders may take note of report that Niti Aayog CEO Amitabh Kant said India was the youngest country with a vibrant startup eco-system and it must convert the present (COVID-19) crisis into an opportunity. Meanwhile, the Centre launched the Aatmanirbhar Bharat ARISE-Atal New India Challenges programme to support MSMEs and start-ups for making India innovative, resilient, tech-driven, and research and development (R&D)-oriented. However, rising coronavirus cases in the country are likely to weight on sentiments in the markets. Recording its worst-ever single-day spike of 95,529 coronavirus cases, India's tally has surged past the 4.4-million mark to 4,462,965. There may some cautiousness with ICRA's report that state governments' deficit is seen in the range from 4.25 per cent up to 5.52 per cent of the gross state domestic product (GSDP) in the current fiscal. There will be some reaction in hotel and hospitality industry stocks with a study by industry chamber CII and hospitality consulting firm Hotelivat showing that the coronavirus pandemic has dealt a crippling blow to the Indian travel and tourism industry and the entire value chain linked to the sector is likely to lose around Rs 5 lakh crore or $65.57 billion. Oil and gas stocks will be in focus with government data showing that India's fuel demand fell 15.6 percent in August compared with the same month last year. Consumption of fuel totalled 14.39 million tonnes.

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

Nifty Top volumes

• Wipro is planning to set up a Digital Innovation Hub in Dusseldorf, Germany. 
• SBI is planning to launch a loan product called Safe and Fast Agriculture Loan. 
• Dr. Reddy's Laboratories has launched Remdesivir, under a brand name Redyx in India. 
• HCL Technologies has set up its first development centre in Sri Lanka.