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Indian equity benchmarks ended higher on Wednesday boosted by Realty, IT and TECK stocks as continued fall in domestic COVID-19 cases improved investor risk appetite. The benchmarks opened on a subdued note but surged in mid-morning deals, as sentiments got some encouragement with Industry chamber -- Confederation of Indian Industry (CII) stating that healthy flow of foreign direct investments (FDI) into the country corroborates India’s status as a preferred investment destination among global investors. FDI into the country grew 19 per cent to $59.64 billion during 2020-21. Some optimism also came as the government begun assessing the impact of the second wave of infections on different sectors and may look at providing support at an appropriate time to segments requiring fiscal help, with the world's worst outbreak of COVID pandemic stalling a nascent economic recovery. Besides, the Centre advised states and UTs to plan for scaling up vaccination coverage through available stocks and anticipated supplies till the end of June, while private hospitals were advised not to allow offline vaccine registration as all registrations should be online.

Domestic equities remained upbeat in late afternoon deals, as private report stated that India’s economy is likely to have grown 0.6-2.1 per cent in the fourth quarter of the fiscal year 2020-21 (Q4FY21), better than the government's prediction of a contraction. However, for the entire FY21, they see gross domestic product (GDP) contracting 7-8 per cent. The growth in Q4 is led by widespread recovery in volumes and also low base effect, while the full-year contraction is mainly on account of a lockdown last year, which shut the economy for months. Meanwhile, Apparel Export Promotion Council (AEPC) has urged the government to declare apparel exports as essential services and exempt the exporting units from lockdowns across India.

On the global front, Asian markets ended mostly higher on Wednesday despite the slightly negative cues from Wall Street, as a continued pullback in treasury yields reflects easing worries about inflation. However, traders are cautious and refraining from making major moves amid the continued surge in coronavirus cases in most markets in the region, particularly in India and Japan. European markets were trading mostly in green as inflation concerns eased and positive business and consumer sentiment data from France boosted hopes of economic recovery. France's consumer confidence index rose to 97 in May from 95 in April. The manufacturing sentiment index advanced to 107 in May from 104 in the previous month. This was the highest score since August 2018, when the reading was 109.

Back home, on the sectoral front, auto stocks were in focus as India Ratings and Research (Ind-Ra) said the second wave of the Covid-19 pandemic has interrupted the sales momentum recorded by the automobile industry in 3Q-4Q FY21. There was some reaction in agriculture related industry stocks as the agriculture ministry said India's foodgrain production is estimated to rise 2.66 per cent to a new record of 305.43 million tonnes in the current crop year 2020-21, on better output of rice, wheat and pulses amid good monsoon rains last year.

Finally, the BSE Sensex rose 379.99 points or 0.75% to 51,017.52, while the CNX Nifty was up by 93.00 points or 0.61% to 15,301.45.      

The BSE Sensex touched high and low of 51,072.61 and 50,620.45, respectively and there were 22 stocks advancing against 8 stocks declining on the index.   

The broader indices ended mixed; the BSE Mid cap index fell 0.14%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Realty up by 2.85%, IT up by 1.85%, TECK up by 1.66%, Consumer Discretionary up by 0.84% and Auto up by 0.48%, while Metal down by 2.42%, Power down by 2.31%, Utilities down by 1.79%, Basic Materials down by 0.49% and Consumer Durables were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 4.82%, Bajaj Finance up by 2.72%, Infosys up by 2.60%, Maruti Suzuki up by 1.72% and HDFC up by 1.55%. On the flip side, Power Grid down by 3.11%, NTPC down by 1.77%, ONGC down by 1.18%, Kotak Mahindra Bank down by 0.56% and Dr. Reddys Lab down by 0.41% were the top losers.

Meanwhile, SBI research report 'Ecowrap' has said that India’s Gross domestic product (GDP) is likely to grow at 1.3 percent (with downward bias) in the fourth quarter of 2020-21 as against NSO (National Statistical Office) projection of a negative (-)1 percent. It also expects GDP decline for the full year (FY 2020-21) to be around 7.3 percent as compared to its earlier prediction of minus 7.4 percent.

According to the report, going by the estimate of 1.3 percent GDP growth, India would still be the fifth-fastest-growing country among 25 nations that have released their GDP numbers so far. It said one likely consequence of any upward revision in FY21 estimates is a concomitant decline in FY22 GDP estimates. Its estimates now indicate that there might be nominal GDP loss of up to Rs 6 lakh crore during Q1 FY22 as compared to loss of Rs 11 lakh crore in Q1 FY21.

The research report further said Real GDP loss would be in the range of Rs 4-4.5 lakh crore and, hence, real GDP growth would be in the range of 10-15 percent (as against RBI forecast of 26.2 per cent).

The CNX Nifty traded in a range of 15,319.90 and 15,194.95 and there were 31 stocks advancing against 18 stocks declining, while 1 stock remain unchanged on the index.     

The top gainers on Nifty were Bajaj Finserv up by 4.61%, Bajaj Finance up by 2.67%, Infosys up by 2.45%, Grasim Industries up by 2.41% and Wipro up by 1.87%. On the flip side, Power Grid down by 3.01%, Hindalco down by 2.51%, JSW Steel down by 2.42%, Tata Steel down by 2.28% and NTPC down by 1.90% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 decreased 13.64 points or 0.19% to 7,016.15 and Germany’s DAX decreased 19.01 points or 0.12% to 15,446.08, while France’s CAC increased 4.68 points or 0.07% to 6,394.95.

Asian markets ended mostly higher on Wednesday as optimism around a swift economic recovery from the Covid-19 pandemic supported the market sentiments. Moreover, easing worries about inflation after US Federal Reserve officials reaffirmed a dovish monetary policy stance also boosting sentiment. Chinese shares ended higher, followed with strong yuan as the Chinese central bank signalled that authorities are comfortable with a recent rally by setting a strong daily reference rate. Moreover, Japanese shares settled up with expectations of progress in mass inoculations against the corona-virus in Japan. Meanwhile, markets in Malaysia, Singapore and Indonesia were closed for Vesak Day.

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