Indian equity benchmarks closed volatile day with notable gains on Tuesday, with Sensex and Nifty gaining around 150 and 50 points, respectively. After a positive start, key indices turned volatile, affected with FICCI's Economic Outlook Survey stating that India's economy will grow at a median rate of 6% during the Q1FY20. Also, it pegged the annual median GDP growth forecast for 2019-20 at 6.9%, with a minimum and maximum estimate of 6.7% and 7.2%, respectively. Domestic sentiments also remained cautious during the day, amid a private report stating that India's economic growth momentum is expected to slip further as there is no quick fix solution for the structural issues that the economy is facing. However, markets managed to keep their heads in green terrain for the most part of the trading session, taking support with Chief Economic Advisor (CEA) Krishnamurthy Subramanian's statement that the ongoing tariff war between the US and China will not have any impact on India's export which is just below 2 percent of the global trade. Some support also came from the Reserve Bank of India's (RBI) decision to transfer a record Rs 1,23,414 crore of its surplus to the central government for the fiscal year 2018-19 or FY19 (July to June), and an additional Rs 52,637 crore of excess provisions as recommended by the Bimal Jalan committee on Economic Capital Framework (ECF). Finally, the BSE Sensex gained 147.15 points or 0.39% to 37,641.27, while the CNX Nifty was up by 47.50 points or 0.43% to 11,105.35.

The US markets ended in red on Tuesday as traders expressed uncertainty about the escalating US-China trade war. President Donald Trump has claimed top Chinese officials called asking for the resumption of trade talks, but Chinese Foreign Ministry spokesman Geng Shuang continues to say he has not heard of any recent call. Geng said that China hopes the US will return to rationality, stop its wrong practices and create conditions for the two sides to resume talks on the basis of mutual respect. Besides, the yield curve between the ten-year and two-year yields inverting to its worst level since 2007 also led to renewed concerns about a looming recession. On the economic data front, consumer confidence in the US showed a slight deterioration in the month of August, according to a report released by the Conference Board. The Conference Board said its consumer confidence index edged down to 135.1 in August after surging up to 135.8 in July. Street had expected the index to show a much more substantial decrease to 130.0. The modest decrease by the headline index came as the expectations index slid to 107.0 in August from 112.4 in July, with consumers moderately less optimistic about the short-term outlook. The percentage of consumers expecting business conditions will be better six months from now fell to 21.9 percent from 24.0, while those expecting conditions will worsen increased to 10.0 percent from 8.4 percent. Dow Jones Industrial Average dropped 120.93 points or 0.47 percent to 25777.90, Nasdaq lost 26.79 points or 0.34 percent to 7826.95 and S&P 500 was down by 9.22 points or 0.32 percent to 2869.16.

Crude oil futures ended higher on Tuesday following data showing significant output cuts by major oil producers in July and expectations for a drop in weekly US crude supplies. The Joint Ministerial Monitoring Committee of Organization of the Petroleum Exporting Countries (OPEC) and non-cartel oil producers (OPEC+) reported that OPEC+ production limits, in place since the end of last year, have reached 159% in July 2019, up 22% from a month earlier. The committee also said it expects a significant drop in crude inventory in the second half of the year. Besides, Mild optimism about resumption of US-China trade talks contributed a bit to oil's uptick. US President Donald Trump said that he believed Beijing was sincere in its desire to reach an agreement. Benchmark crude oil futures for October surged $1.29 or 2.4 percent to settle at $54.93 a barrel on the New York Mercantile Exchange. October Brent gained 81 cents or 1.4 percent to settle at $59.51 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly higher against dollar on Tuesday, on persistent selling of the American currency by exporters.  Sentiments were also buoyed with Chief Economic Advisor Krishnamurthy Subramanian's statement that the ongoing trade war between the United States of America and China will not have any impact on Indian export which is just below 2 per cent of the global trade. Market participants paid no heed towards Ficci Economic Outlook Survey stating that India's economy will grow at a median rate of 6% during the Q1FY20. Also, it pegged the annual median GDP growth forecast for 2019-20 at 6.9%, with a minimum and maximum estimate of 6.7% and 7.2%, respectively. Besides, positive trend in equity market coupled with dollar losing sheen against some other currencies overseas mainly aided the currency's appreciation. On the global front, U.S. dollar edged lower on Tuesday, amid investor consternation over current trade issues that led to increased volatility between the dollar-yen pairing a day earlier. Finally, the rupee ended at 71.48, 54 paise stronger from its previous close of 72.02 on Monday.

The FIIs as per Tuesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 4159.90 crore against gross selling of Rs 4866.18 crore, while in the debt segment, the gross purchase was of Rs 1477.27 crore with gross sales of Rs 1152.36 crore. Besides, in the hybrid segment, the gross buying was of Rs 17.03 crore against gross selling of Rs 16.73 crore.

The US markets ended lower on Tuesday weighed down by financial stocks as a deepening of the Treasury yield curve inversion raised US recession worries. Asian markets are trading mixed on Wednesday as investors assessed the latest in the unpredictable path of trade talks between the US and China. Indian markets extended their gaining streak for third straight session and settled in green territory on Tuesday amid positive domestic and global cues. Today, the markets are likely to make a cautious start amid lackluster cues from Asian peers. There will be some cautiousness with Moody's Investors Service's statement that the economic measures announced by Finance Minister Nirmala Sitharaman are unlikely to provide some form of confidence and improve business sentiment and consumer sentiment. Moody's, which has lowered India's gross domestic product (GDP) forecast to 6.4% for FY20, said there is significant uncertainty in terms of the growth prospects both because of domestic as well as external factors. Traders will also be concerned with a private report indicating that India's economic growth momentum is expected to slip further as there is no quick fix solution for the structural issues that the economy is facing. It added that the lackluster growth in the Index of Industrial Production (IIP) is expected to prevail as the manufacturing sector is facing multiple challenges which will take time to get resolved. However, traders may take note of report that the Union cabinet in its meeting on Wednesday would take up proposals to relax foreign direct investment (FDI) in various sectors, including single brand retail and digital media. There will be some buzz in the banking stocks with global rating agency S&P's report that given the weak credit demand from corporates and the lingering NBFC crisis, just announced recapitlisation of state-run banks will not deliver on the key objectives of higher lending and a recovering in their fortunes. There will be some reaction in auto ancillary stocks with Crisil's report that the Rs 3.5 lakh-crore automotive components sector in India is expected to log a 5-7% compound annual growth rate (CAGR) over FY20 and FY21, down from 12% in the preceding two fiscals, due to a steep decline in domestic vehicles sales.

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

Nifty Top volumes

• BPCL is planning to invest Rs 1,500-1,700 crore in building a floating LNG import terminal at Krishnapatnam in Andhra Pradesh by 2022. 
• Kotak Mahindra Bank has entered into partnership with Ola to allow the bank customers to book a ride directly from the banking app. 
• Infosys has bought back 11.05 crore of its shares under its Rs 8,260 crore buyback offer that began in March 2019. 
• Hero MotoCorp has showcased the XPulse 200 adventure motorcycle's offroading capability at the XTracks - Thrill of Riding event in Chennai.