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Indian markets ended higher on Tuesday with much of the gains coming toward the fag-end of the session amid foreign funds inflow. Today, markets are likely to get gap-up opening tracking firm global cues. Traders will be taking encouragement with Finance ministry’s statement that the economy is on course to achieve projected 8-8.5 per cent growth based on high-frequency indicators for the first quarter of the current fiscal. Some support will come as Foreign Institutional Investors (FII) were net buyers for the second day running on Dalal Street. FIIs pumped in Rs 976 crore on July 19. Traders may take note of Union Finance Minister Nirmala Sitharaman has said the mass consumption items such as pulses, wheat, rice, flour, and curd will not attract the 5 per cent goods and services tax (GST) when sold loose, and not pre-packed or pre-labelled. However, there may be some cautiousness with private report that a weak rupee and elevated fuel prices will keep India’s current account deficit (CAD) under pressure with analysts seeing it at about 3% of GDP in FY23 compared to 1.2% in FY22 even as these will exert pressure on government finances. Besides, investment in the Indian capital markets through participatory notes (P-notes) declined to Rs 80,092 crore till June-end, making it the lowest level in 20 months, on aggressive rate hike by the US Federal Reserve. There will be some buzz in the auto industry stocks as the Society of Indian Automobile Manufacturers (SIAM) data showed that India's passenger vehicle exports rose by 26 per cent in the first quarter as compared with the April-June period of last fiscal which saw disruptions due to the second wave of COVID-19. Oil industry stocks will be in focus with a private report that India has cut a windfall tax on diesel and aviation fuel shipments by 2 rupees a liter. There will be some reaction in edible oil industry stocks as Solvent Extractors' Association (SEA) said that India's oilmeals export jumped over two-fold in June to 4,31,840 tonnes on record shipment of rapeseed meal. The exports stood at 2,03,868 tonnes in the same month last year. Investors awaited financial results from blue-chip companies including Wipro, IndusInd and Havells due later in the day for domestic cues.

The US markets ended higher on Tuesday as more companies joined big banks in reporting earnings that beat forecasts, offering respite to investors worried about higher inflation and a tightening Fed denting the corporate bottomline. Asian markets are trading in green on Wednesday mirroring a strong session on Wall Street overnight.

Back home, Indian equity benchmarks extended their winning run for the third straight session amid volatile trade on Tuesday. After making gap down opening, domestic indices swung between gains and losses during intraday deals, as traders were concerned with private report stating that American brokerage has cut its FY23 real GDP expansion estimate for India by 0.40 per cent to 7.2 per cent on slower global growth. It said the GDP growth will slow down to 6.4 per cent in FY24, adding that this is lower by 0.30 per cent compared to the earlier estimate. Some cautiousness also came in the markets as the ministry of food and public distribution has said that rice stocks in the central pool are likely to plunge below the buffer norm by 2.2 million tonne (MT) or 16%, if the free ration scheme - Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) - is extended to the whole of the second half of the current financial year. The ministry said running the scheme for October-March FY23 with the current grain composition will cost the exchequer a massive Rs 90,000 crore if not higher. However, key gauges gained some strength in late afternoon session to end in green on the back of fag-end buying interest in Realty, banking and Auto stocks.  Traders also found some solace with Minister of State for Finance Pankaj Chaudhary’s statement that the government has taken several supply-side measures to tame rising inflation. Chaudhary stated the price situation of major essential commodities is monitored by the government on a regular basis and corrective action is taken from time to time. Some support also came as Minister of State for Finance Bhagwat Karad stated that concrete steps taken by the government and RBI helped banks recover bad loans worth over Rs 8.6 lakh crore in the last eight financial years. Finally, the BSE Sensex rose 246.47 points or 0.45% to 54,767.62 and the CNX Nifty was up by 62.05 points or 0.38% to 16,340.55.

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