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Indian markets closed lower amid weak global cues Wednesday even though they recovered half of their intraday losses in late afternoon deals. Today, the start of the F&O series expiry session is likely to be mildly positive tailing the gains in other Asian markets. Some support will come as the Reserve Bank of India (RBI) allowed payment system providers, prepaid card issuers, card networks and white label ATM operators access to its Centralised Payment Systems (CPS), such as real time gross settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems in the first phase of its plan bring non-banks in the same platform. However, there may be some cautiousness with a private report that the Indian economy is expected to face some pressure in the current financial year due to the second wave of the pandemic, coupled with weaker consumer sentiment, but a large capex by the government can be a saving grace for the economy. Traders may take note of report that continuing efforts to foster ease of doing business as well as encourage startups ecosystem, the government has approved amendments to the Limited Liability Partnership (LLP) Act, including decriminalising 12 offences under the law. There will be some reaction in MSME stocks with a private report stating that non-performing assets in the micro, small and medium enterprises grew in the March quarter to 12.6 per cent against 12 per cent at the end of the preceding December quarter. The Rs 500-crore Tatva Chintan Pharma Chem IPO shares are scheduled to make their stock market debut on Thursday. The public issue was sold during July 16-20, and received the second-highest subscription of 185.23 times among IPOs in 2021. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended mostly lower on Wednesday in listless trade after the Federal Reserve gave no clue about when it might start reducing its purchases of government bonds, even as it said the economic recovery is on track. Asian markets are trading in green on Thursday after US Federal Reserve left the benchmark interest rates near zero.

Back home, Indian equity benchmarks erased almost all their losses to end marginally in the red on Wednesday as the regulatory crackdowns in China continued to impact investor sentiment. Markets opened weak and saw panic selling, as the International Monetary Fund (IMF) has cut India's gross domestic product (GDP) growth forecast to 9.5 percent for the fiscal year to March 31, 2022 as the onset of a severe second COVID-19 wave cut into recovery momentum. This forecast for 2021-22 is lower than the 12.5 per cent growth in GDP that IMF had projected in April before the second wave took a grip. Some concern also came after department-related Parliamentary Standing Committee observes that the stimulus package announced by the government for the economic revival from the pandemic hit economy has been found to be inadequate as the measures adopted were more of loan offering and long-term measures instead of improving the cash flow to generate demand as immediate relief. Traders also took a note of Finance Minister Nirmala Sitharaman informed Parliament that the number of wilful defaulters has increased from 2,208 to 2,494 at the end of March 31, 2021. As per RBI data on global operations, during the last three financial years, public sector banks (PSBs) have effected recovery of Rs 3,12,987 crore in non-performing assets (NPAs) and written-off loans. Markets however recouped most of its losses in late afternoon trade, as traders found some solace with Minister of State for Finance Pankaj Chaudhary has said increased tax collection in the first quarter this fiscal (Q1FY22) shows that the economy is on the recovery path. Net direct tax collection in the April-June quarter of the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17 lakh crore during the same period of the previous fiscal. Some support also came as Union Minister of State for Finance Bhagwat Kisanrao Karad said that the government has taken a number of steps to facilitate digital banking, doorstep banking services and digital lending platforms. Finally, the BSE Sensex fell 135.05 points or 0.26% to 52,443.71, while the CNX Nifty was down by 37.05 points or 0.24% to 15,709.40.

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