Indian equity benchmarks pared their gains to end flat on Tuesday, ahead of the June F&O expiry due on June 28. Markets started the session on a negative note but managed to trade in green terrain for the most part of the trade, supported by finance ministry's statement that it has simplified the process of granting additional borrowing limits to the states, keeping in view the government's policy for cooperative federalism. Some support also came with Employees' Provident Fund Organisation's (EPFO) payroll data that as many as 41.26 lakh new jobs were created in the eight months till April this year, with largest ever addition of 6.85 lakh in April alone. The street also got comfort with MSME secretary A K Panda's statement that the credit guarantee to the micro and small enterprises (MSEs) sector will double to over Rs 40,000 crore this fiscal under the Credit Guarantee Fund Trust for MSE. Adding some optimism, Prime Minister Narendra Modi said that the rising crude prices have not resulted in a spike in inflation and the macroeconomic fundamentals of the country remain strong. Some relief also came with a report noting that a significant percentage of the country's chief financial officers believe that GST had a positive impact on the overall business climate. Further, markets touched their intraday highs in late afternoon session, but a selloff in the last leg of trade lead benchmarks to end near neutral lines. Traders got cautious with report that the share of foreign portfolio investments (FPIs) in domestic capital markets through participatory notes (P-notes) slipped over 9-year low of more than Rs 93,000 crore at the end of May, amid stringent norms put in place by SEBI to check the misuse of these instruments. Domestic sentiments also got hit with the Reserve Bank of India's (RBI's) data report that Indian companies' investments into their overseas subsidiaries/joint ventures have dropped by 63% to $1.17 billion in May 2018 as compared to $3.12 billion in May 2017. Investors took note of a private report that the RBI is expected to push key policy rates higher again in order to keep inflation in check. Finally, the BSE Sensex gained 19.69 points or 0.06% to 35,490.04, while the CNX Nifty was up by 6.70 points or 0.06% to 10,769.15.

The US markets ended higher on Tuesday with modest gains as equity benchmarks attempted to recover some of the sharp losses from the previous session. Modest moves on the markets reflect cautious sentiment among traders, as uncertainty over trade policy, which triggered Monday's selloff, remains. Investors remained worried that trade tensions between the US and major trading partners such as China and the European Union could develop into a big drag on the global economy. They're also tracking some disagreement and uncertainty within the Trump administration over trade-related matters. On the economic front, reflecting deterioration in expectations, the Conference Board released a report showing an unexpected decline in US consumer confidence in the month of June. The Conference Board said its consumer confidence index fell to 126.4 in June from a revised 128.8 in May. The unexpected decrease by the headline index was on account of a drop by the expectations index, which slid to 103.2 in June from 107.2 in May. The percentage of consumers anticipating business conditions will improve over the next six months decreased to 21.4% from 23.3%, while those expecting business conditions will worsen rose from 7.8% to 9.8%. The Dow Jones Industrial Average gained 30.31 points or 0.12 percent to 24283.11, the S&P 500 added 5.99 points or 0.22 percent to 2723.06 and the Nasdaq was up by 29.62 points or 0.39 percent to 7561.63.

Crude oil futures ended higher on Tuesday, with benchmark settling above $70 for the first time since May, supported by uncertainty over Libyan exports and over the Organization of the Petroleum Exporting Countries' (OPEC's) ability to boost production quickly enough to prevent a shortfall in global supplies. Meanwhile, forces of military commander Khalifa Haftar handed control of Libyan oil ports to National Oil Corporation based in the east, a move that the internationally recognized NOC in Tripoli dismissed as illegal. Benchmark crude oil futures for August delivery rose $2.45 or 3.6 percent to settle at $70.53 a barrel on the New York Mercantile Exchange. August Brent crude gained 1.58 or 2.1 percent at $76.31a barrel on London's Intercontinental Exchange.

Falling for the second consecutive session, Indian rupee depreciated against dollar on Tuesday, on increased demand for the US currency from importers. Sentiments remained weak with the Reserve Bank of India's (RBI's) data report that Indian companies' investments into their overseas subsidiaries/joint ventures have dropped by 63% to $1.17 billion in May 2018 as compared to $3.12 billion in May 2017. Investors also took note of a private report that the RBI is expected to push key policy rates higher again in order to keep inflation in check. However, losses were limited as traders found some comfort with interim finance minister Piyush Goyal's statement that the country is on a safe wicket as far as the rupee is concerned and the currency will be stable in the long-term. On the global front, dollar held near a one-week low against a basket of currencies on Tuesday as investors retreated to the sidelines, while concerns grew about an intensifying conflict between the United States and its trade partners, particularly China. Finally, the rupee ended at 68.25, 12 paise weaker from its previous close of 68.13 on Monday.

The FIIs as per Tuesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4116.62 crore against gross selling of Rs 3796.89 crore, while in the debt segment, the gross purchase was of Rs 519.85 crore with gross sales of Rs 1194.94 crore. Besides in the hybrid segment, the gross buying was of Rs 0.47 crore against gross selling of Rs 1.73 crore.

The US markets ended higher on Tuesday, as a rally in American crude overshadowed lingering concerns about the impact of heightened trade tensions. Asian markets are trading mixed on Wednesday, as concerns lingered over the impact of potential global trade restrictions. Indian equity benchmarks ended Tuesday's range-bound session with marginal gains, following mixed global cues. Today, the markets are likely to make flat-to-negative start on penultimate session of F&O expiry. Traders will be concern over the Reserve Bank of India (RBI) calling for greater vigilance on the domestic macro-economic front saying conditions, which pushed Gross Domestic Product (GDP) growth to 7.7% in March 2018 quarter, are changing and warned that bad loan situation might worsen. There will be some cautiousness with a report that government debt rose 1.7% to over Rs 76.94 lakh crore in the January-March period of 2017-18 fiscal over the previous quarter. The debt was Rs 75.66 lakh crore as of December 2017.  However, some respite may come later in the trade with the government expecting a tremendous improvement in tax buoyancy from the goods and services tax (GST) and, ahead of its first anniversary, expect collections from the landmark levy to average more than Rs 1 lakh crore a month in this fiscal year. There will be some buzz in the cement sector stocks with ICRA's report that domestic cement production is expected to grow at 6% this fiscal, however, rising input costs are likely to put pressure on the operating profitability of cement companies in the coming quarters. Also, there will be buzz in banking sector stocks with the RBI's latest report stating that the gross non-performing assets (GNPAs), or bad loans, ratio in the Indian banking system is likely to rise from 11.6% in March 2018 to 12.2% by the end of March next year.

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

Nifty Top volumes

• Reliance Industries' subsidiary -- Reliance Jio Infocomm has signed a $1 billion equivalent term loan facility covered by Korea Trade Insurance Corporation (K-SURE) on June 22, 2018. 
• Hero MotoCorp is expecting a double-digit growth for its global business in FY19 on the back of new launches and more focus on markets with potential of higher volumes. 
• UltraTech Cement is planning to raise Rs 9,000 crore through an issue of redeemable, non-convertible debentures on a private placement basis. 
• Lupin is getting ready for the next wave of growth in Japan which will come from biosimilars.