The penultimate day of June series futures and options contract expiry turned out to be a disappointing session for the Indian equity indices, as they went on to extend the declining streak for the third successive session and settled below the psychological 9,500 (Nifty) and 30,900 (Sensex) levels. The session largely remained characterized by choppiness, as the aimless indices moved only sideways in a tight band, lacking any significant upside triggers. Trading Sentiments were undermined after global credit rating agency Fitch maintained its negative outlook on Indian banks because of erosion of the sector's core capitalization, even as they enter the final phase of Basel III migration. This is based on its assessment that the sector's core capitalization, which has been eroded in the last few years, will remain challenged unless it is boosted by adequate capital support from the authorities or equity raising from capital markets. Further, negative opening of European markets and ongoing weakness in other Asian markets, after Wall Street was knocked hard in the wake of a delay to a US healthcare reform vote, also spoiled investors' sentiments. Some weakness also came with Finance Minister Arun Jaitley's statement that people may have to face some difficulty initially during the Goods and Services Tax (GST) is rolled out, but in the long run the new indirect tax regime would help cut tax evasion and check price rise. He also said that the GST Council will look at bringing real estate within the GST net by next year and revisit taxing of petroleum products under the new regime in 1-2 years. However, the broader markets showed some resilience and settled on a positive note, outperforming their larger peers by quite a margin. Market participants got some confidence with Union Power Minister Piyush Goyal's statement that the GST will reduce the work of businesses by reducing the number of taxes from 11 to one. He added that the Goods and Services Tax Network (GSTN) will make filing returns and make book keeping very easy. Finally, the BSE Sensex declined 123.93 points or 0.40% to 30834.32, while the CNX Nifty was down by 20.15 points or 0.21% to 9,491.25.

The US markets closed higher on Wednesday, with the S&P 500 posting its largest one-day gain in two months while Nasdaq Composite recorded its best day in eight months. All the three main indexes erased Tuesday's losses, which came after a delay to a vote on health-care bill, prompting worries about the prospects for President Donald Trump's pro-growth agenda. On the economy front, an early look at US trade patterns in May points to a small decline in the nation's trade deficit. The advanced trade gap in goods - services is excluded - fell by 1.8% to $65.9 billion in May. The government will release overall trade numbers for May next week, but the size of the trade deficit is generally tied to changes in exports and imports of goods. Trade patterns involving services rarely change much from month to month. A lower deficit gives a boost to gross domestic product, the official scorecard for the US economy. An advanced look at wholesale inventories, meanwhile, showed a 0.3% increase in May. And an early look at retail inventories reflected a 0.6% spike. The Dow Jones Industrial Average added 143.95 points or 0.68 percent to 21,454.61, Nasdaq gained 87.79 points or 1.43 percent to 6,234.41, while S&P 500 edged higher by 21.31 points or 0.88 percent to 2,440.69.

Crude oil futures managed to extend their gains on Wednesday after data showed that domestic crude supplies rose last week, but gasoline inventories fell more than forecast. Crude prices which traded lower in early deals recovered, as the US Energy Information Administration (EIA) said in its weekly report that crude oil inventories rose by 118,000 barrels in the week ended June 23. However, the report also showed that gasoline inventories decreased by 894,000 barrels, compared to expectations for a drop of 583,000 barrels, while the distillate inventories including diesel, reported a fall of 223,000 barrels. Benchmark crude oil futures for August delivery ended up by $0.34 or 1.1 percent to $44.74 on the New York Mercantile Exchange. In London, Brent crude for September delivery ended up by 1.34 percent to $47.55 on the ICE.

In line with equity market, the Indian rupee ended marginally lower against US dollar due to fresh demand for the American currency from banks and importers. Traders remained cautious ahead of the Goods and Services Tax (GST) implementation from July 1, 2017. According to the Finance Minister Arun Jaitley, people may have to face some difficulty initially during the GST is rolled out, but in the long run the new indirect tax regime would help cut tax evasion and check price rise. He also said that the GST Council will look at bringing real estate within the GST net by next year and revisit taxing of petroleum products under the new regime in 1-2 years. Besides, US dollar's gain against other currencies overseas too dragged the rupee down. On the global front, euro surged to a one-year high on Wednesday, sparked by European Central Bank chief Mario Draghi's startlingly upbeat view on the inflation outlook. Finally, the rupee ended at 64.55, 2 paise weaker from its previous close of 64.53 on Tuesday.

The FIIs as per Wednesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 7896.55 crore against gross selling of Rs 6954.86 crore, while in the debt segment, the gross purchase was of Rs 994.89 crore with gross sales of Rs 249.31 crore.

The US markets ended in green terrain on Wednesday on bargain hunting, as traders picked up stocks at relatively reduced levels following yesterday's weakness. Asian markets have made a positive start with most of the markets were trading with a gain of over half a percent, taking cues from a stronger finish in US markets, with traders expected to digest comments from top central bankers overnight. The Indian markets truly depicted the choppiness and ended in red in the last session, as worries about provisioning towards large NPA kept investors on the sidelines. Today, the start of the F&O series expiry session is likely to be in green on positive global cues. However, the expiry day is very much likely to bring in volatility later in the day. Traders will be getting some support with India Meteorological Department's (IMD) statement that 79 percent of the country has received normal-to-above-normal rainfall. It is seeing a steady progress in rainfall in central India and expects average July rainfall at 96 percent. Moreover, it maintains monsoon projection at 98 percent as was predicted in June. Meanwhile, Finance Minister Arun Jaitley said that the Seventh Pay Commission's recommendations have been cleared with 34 modifications. The revised rates will be effective from July 1, 2017. The increased allowance will impose an additional annual burden of Rs 30,748 crore on the exchequer. There will be some buzz in the banking stocks with former RBI Governor Y V Reddy stating that India needs to develop its own path to attain capital adequacy for public sector banks (PSBs) as required by the Basel III global norms.

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

Nifty Top volumes

• Coal India has received higher e-auction realizations this month for coal sold on long-term contracts to the captive power plants.
• ICICI Bank has received an approval and allotted 21,470 Senior Unsecured Redeemable Long Term Bonds in the nature of Debentures aggregating Rs 2,147 crore on private placement basis.
• Maruti Suzuki's entry level hatchback, Alto has reportedly retained its best-selling car in India tag, registering sales of over 1.07 lakh units in the first five months of calendar year 2017.
• Gujarat Urja Vikas Nigam is willing to buy 100% stake in Tata Power Company and Adani Power's Mundra power plant for one rupee.