Wednesday's trading session turned out to be extremely sanguine for local equity markets and concluded near day's highest point, on the back of widespread buying by participants along with firm cues from the global markets. After making optimistic start, key indices turned cautious, as Fitch Ratings in its latest Global Economic Outlook (GEO) for May has projected Indian economy to contract 5% in current financial year (FY21) on account of slump in economic activities and very stringent lockdown policy. This is substantially lower than 0.8 percent growth for FY21 projected in April. But, markets quickly regained traction as traders found support with report that the government notified the Rs 3 lakh crore Emergency Credit Line Guarantee Scheme for Medium, Small and Micro Enterprises (MSMEs) under the Atma Nirbhar Bharat Abhiyan to help them tide over the economic distress being faced due to the COVID-19 pandemic. The local equity indices gathered further ground in late afternoon session, even as credit rating agency CRISIL in its latest report stated that India is staring at its worst recession in the current fiscal since Independence. The agency predicted the economy to shrink by 5 per cent in the current fiscal because of coronavirus lockdown and added that the first quarter (April to June 2020) will suffer a staggering 25 per cent contraction. Markets participants also took a note of the road transport, highways and MSME minister Nitin Gadkari's statement that more liquidity needs to be pumped in the market to boost the coronavirus-hit economy. He also said states should come forward with Rs 20 lakh crore, while another Rs 10 lakh crore can be harnessed from public-private investment. Finally, the BSE Sensex gained 995.92 points or 3.25% to 31,605.22, while the CNX Nifty was up by 285.90 points or 3.17% to 9,314.95.

The US markets ended higher on Wednesday, following the advance seen in the previous session, as traders continued to express optimism about a quick economic recovery as the country reopens following the coronavirus lockdown. Financial stocks helped to lead the way higher on the day, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index spiking by 6.7 percent and 5.1 percent, respectively. Substantial strength was also visible among housing stocks, as reflected by the 5.1 percent jump by the Philadelphia Housing Sector Index. Steel, oil service, tobacco and telecom stocks also saw considerable strength, moving higher along with most of the other major sectors. Sentiments got boost despite rising tensions between Beijing and Washington. US-China tensions flared up and fresh economic data showed how badly American businesses have been thrown off course by the coronavirus pandemic. Meanwhile, the Federal Reserve reported that economic activity through May 18 fell sharply in most of its 12 districts, amid mass unemployment and challenges in bringing employees back to work during the pandemic, as workers feared for their health, faced limited access to child care and received generous unemployment benefits.

Crude oil futures ended sharply lower on Wednesday on reports of a likely move by Russia to increase crude output next month. Russia wants to begin easing production cuts in July, in keeping with the terms of the output curbs agreed to by the Organization of the Petroleum Exporting Countries and its allies earlier this year. Meanwhile, traders also kept an eye on rising tensions in Hong Kong as China looks to impose new security laws that would end the country's autonomy, and worsening relations between the US and China.  Secretary of State Mike Pompeo announced that he told Congress that Hong Kong is no longer autonomous from China. The announcement could pave the way for the Trump administration revoke its special treatment-it is exempt from tariffs levied on Chinese imports. Crude oil futures for July dropped $1.54 or 4.5 percent to settle at $32.81 a barrel on the New York Mercantile Exchange. July Brent crude fell $1.43 or 4 percent to settle at $34.74 a barrel on London's Intercontinental Exchange.

Erasing all of its initial gains, Indian rupee ended marginally lower against US dollar on Wednesday, due to fresh demand for the American currency from banks and importers. Traders remained cautious as Fitch Ratings forecast a 5% contraction of Indian economy in the current fiscal, on account of slump in economic activities and very stringent lockdown policy. Also, highlighting the grave economic impact of COVID-19, Crisil has said India is staring at its worst recession since Independence. Besides, dollar's strength against other currencies overseas too weighed on the rupee.  On the global front, U.S. dollar edged higher on Wednesday as worries about the U.S. response to China's proposed security law for Hong Kong injected a more cautious tone into foreign exchange markets. Finally, the rupee ended at 75.71, 5 paise weaker from its previous close of 75.66 on Tuesday.

The FIIs as per Wednesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 11762.46 crore against gross selling of Rs 6980.27 crore, while in the debt segment, the gross purchase was of Rs 339.03 crore with gross sales of Rs 227.80 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.68 crore against gross selling of Rs 4.17 crore.

The US markets ended in green on Wednesday as traders continued to express optimism about a quick economic recovery as the country reopens following the coronavirus lockdown. Asian markets are trading mostly higher on Thursday as growing optimism about economic recovery from the coronavirus pandemic trumped immediate concerns about a standoff between the United States and China over Hong Kong. Indian markets ended higher on Wednesday and posted biggest single-day gain of the month, as banks and financial heavyweights surged. Today, the start of F&O expiry session is likely to be positive mirroring firm global cues. Traders will be getting some encouragement with Commerce and industry minister Piyush Goyal's statement that worst for the economy is over and revival is in the air. Meanwhile, former RBI governor Duvvuri Subbarao's statement that the country's economy is likely to decline by 5 percent in the current fiscal but may expand by around 5 percent in the next financial year. Traders may take note of report that India may need to inject up to Rs 1.5 lakh crore rupees ($19.81 billion) into its state-owned lenders as their pile of soured assets is expected to double during the coronavirus pandemic. Also, Finance Minister Nirmala Sitharaman has emphasised the need for growing New Development Bank into a global development institution. Though, there may be some concern amid report that with 7,260 cases, India has recorded its biggest single-day spike in total number of coronavirus cases to 158,086 - just a shade behind Turkey. Worldometer data also suggests that the country has seen 190 new deaths in the past 24 hours due to the infection. With this, India's death toll has risen to 4,534. Among states, Maharashtra has the highest number of Covid-19 cases, at 56,948. There may be some cautiousness with SBI Ecowrap report stating that as the coronavirus pandemic and the nationwide lockdown severely impact the economy, India's gross domestic product for the first quarter of the financial year 2020-21 is likely to contract by over 40 per cent. Separately, India may impose anti-dumping duty on imports of a certain type of rubber used in various industries, as the domestic industry has approached the commerce ministry to investigate the alleged dumping of the product from China, European Union, Japan and Russia. Coal stocks will be in focus with report that the Centre is likely to launch the process of auctioning coal blocks for commercial mining on June 11, picking around 50 mines for the hammer.

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

Nifty Top volumes

• Wipro has launched its Global Channel Partner Program. 
• IOC has raised Rs 3000 crore through Unsecured, Listed, Rated, Taxable, Redeemable, NCDs on private placement basis. 
• Kotak Mahindra Bank has launched its over Rs 7,000 crore qualified institutional placement of shares. 
• BPCL has unveiled a new customer-friendly initiative with the launch of cooking gas booking through Whatsapp across the country.