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Indian markets failed to hold on the recovery and ended lower on Wednesday as losses in IT and metal stocks outweighed gains in auto stocks. Today, the markets are likely to make slightly positive start ahead of expiry of the monthly futures & options (F&O) contracts scheduled for later in the day. Investors will be eyeing the index heavyweight Reliance Industries' (RIL) 44th AGM, slated to kick off at 2 pm. Some support will come as data released by the Department for Promotion of Industry and Internal Trade (DPIIT) showed that India had attracted a total foreign direct investments (FDI) inflow of $6.24 billion in April, up by 38 per cent year-on-year. Traders may take note of report that Finance Minister Nirmala Sitharaman made a case for re-thinking financing and development priorities for inclusive, sustainable and resilient infrastructure aligned with Sustainable Development Goals (SDGs). However, there may be some cautiousness as India has recorded 54,319 cases in the last 24 hours, taking the country's total coronavirus caseload to 30,082,169. India also recorded a spike in new deaths with 978 fatalities being reported yesterday. The death toll now stands at 392,014. Meanwhile, an umbrella body for micro, small and medium enterprises AICA sought immediate intervention of Prime Minister Narendra Modi on rising prices of raw materials such as steel, iron ore, aluminum, copper, plastics and paper. There will be some buzz in the real estate industry stocks as the housing sales during the April-June 2021 period stood at around 24,570 units across the top 7 cities, increasing by 93 percent annually but dropping by 58 percent QoQ. Business Process Outsourcing (BPO) industry stocks will be in focus with report that to make India a favourable destination for expansion of voice-related Business Process Outsourcing (BPO), the Centre has liberalised the guidelines for Other Service Providers (OSPs), removing the distinction between domestic and international OSP. There will be some reaction in tours and travel industry stocks as ratings agency Crisil said the tours and travel industry, which was beginning to recover before the second wave of Covid-19 infections began, will now see revenue this fiscal reaching only 35%-40% of the pre-pandemic levels.

The US markets ended mostly lower on Wednesday even as investors cheered data that showed a record peak for US factory activity in June. Asian markets are trading mostly higher on Thursday amid the S&P 500 on Wall Street snapped its two-day winning streak overnight.

Back home, Indian equity benchmarks ended over half a percent lower on Wednesday as investors booked profits at higher levels. Broader markets, midcap and smallcap indices also declined. Key indices opened in the green but soon shed all gains, as some cautiousness prevailed in the markets as a day after reporting less than 50,000 fresh cases, India has now recorded 54,393 in the last 24 hours, taking the country's total coronavirus caseload past 30-million mark. India also recorded a spike in new deaths with 1,129 fatalities being reported yesterday. The death toll now stands at 390,691. Additionally, India’s gene-sequencing consortia has classified the new Delta-plus mutation of coronavirus as a variant of concern, following 22 cases being reported across three states - Maharashtra, Kerala, and Madhya Pradesh. Traders took a note of Care Ratings’ report that notwithstanding the Rs 10,000-crore liquidity infusion through the G-Sap route by the RBI last week and fewer states tapping the bond markets, their cost of borrowing has been heading north, as the coupon hit the highest level since mid-March at 7 percent. At 7 percent, the weighted average yield of state debt has risen by a whopping 44 bps since the first auction of the fiscal on April 8. Benchmarks added losses in late afternoon session after Moody's Investors Service slashed India's growth projection to 9.6 per cent for 2021 calendar year, from its earlier estimate of 13.9 per cent, and said faster vaccination progress will be paramount in restricting economic losses to June quarter. Earlier this month, Moody's had projected India to clock a 9.3 per cent growth in the current fiscal ending March 2022, but severe second COVID wave has increased risks to India's credit profile and rated entities. Traders were also worried amid reports that the aftermath of the COVID-19 pandemic's second wave has left young Indian professionals and working women increasingly vulnerable to the economic uncertainty. However, downfall remain capped with report stating that Indian companies' market capitalization has grown at the fastest pace last year among major economies despite contraction in GDP. Further, it said retail investors have shown higher interest in markets and their numbers have increased by 1.42 crore in FY21 and another 44 lakh in April and May, wondering if this will be a lasting behavioural change or is transitory. Finally, the BSE Sensex fell 282.63 points or 0.54% to 52,306.08, while the CNX Nifty was down by 85.80 points or 0.54% to 15,686.95.

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