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Indian markets ended near-record closing highs on Wednesday boosted by IT and financial stocks as gains in Asian peers and continued decline in domestic COVID-19 cases also lifted the sentiment. Today, the markets are likely to make flat-to-positive start on F&O expiry day tracking overnight gains on Wall Street amid muted trend in Asian peers. There will be some volatility in the markets ahead of the expiry of May series derivative contracts later in the day. There will be some cautiousness as rating agency Crisil in its research report said higher input prices and disruptions to the rural economy have resulted in price pressures and inflation is back to haunt us. The report by Crisil said it sees upside risks to its 5 per cent estimate on consumer price inflation in FY21 because of this. also, a private report stated that India’s economic activity showed signs of beginning to cool off in April as several states resorted to lockdowns to control a deadly second wave of the coronavirus. Besides, India recorded over 211,000 new Covid infections, while deaths from the disease rose by 3,842. The country's total cases now stand at 27.36 million. However, some support may come with private report that the government may at the beginning of the unlock phase announce another stimulus package for the most hit sectors such as small business and self-employed, with the world's worst pandemic outbreak scarring nascent economic recovery. Meanwhile, External Affairs Minister S Jaishankar said India-US ties are one of the major relationships in the world and the challenge before New Delhi and Washington is how to translate their fundamental, societal and geopolitical convergences into actionable policies. Sugar stocks will be in focus with a private report that Indian sugar mills have started selling sugar without the support of government subsidies, which could lift exports by 14% from a year ago to a record 6.5 million tonnes in 2020/21. There will be some reaction in two and three wheeler industry stocks as ratings agency ICRA said the electric two and three-wheelers volume are expected to account for 8-10 per cent and 30 per cent of new vehicle sales in the country by 2025, respectively, owing to low operating cost and attractive subsidy support, among others. Hotel industry stocks will be in limelight as the Hotel Association of India (HAI), the apex body for hotels, has appealed to Prime Minister Shri Narendra Modi for immediate intervention to provide relief to the hospitality industry which is on the verge of collapse.

The US markets ended higher on Wednesday with modest gains as recent comments from Federal Reserve officials helped tamp down concerns about runaway inflation and kept bond yields in check. Asian markets are trading mixed on Thursday as investors look ahead to the release of Chinese industrial profits data for April.

Back home, 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. 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.

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