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Indian markets ended flat on Wednesday after an unabated record-breaking rally in the last few trading sessions, as weak global market trends and fall in HDFC twins spoiled markets. Today, start of the session is likely to be pessimistic tracking weakness in global peers and as investors worry about the impact of rising interest rates on economic growth. There will be some volatility in the session amid weekly F&O expiry later in the day. However, foreign fund inflows likely to aid domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) bought shares worth a net Rs 1,603.15 crore, on 5 July. Some support may come as a report released by United Nations Conference on Trade and Development (Unctad) showed that Foreign Direct Investment (FDI) flows into India rose by 10 per cent to $49 billion in 2022, making it the third largest host country for announced greenfield projects and the second largest for international project finance deals. Traders may take note of G20 Sherpa Amitabh Kant’s statement that high growth of 8-9 per cent could be driven by focus on manufacturing and urbanisation. Meanwhile, the commerce and industry ministry has worked out a detailed plan to promote trade and investment and identified 12 countries including the US and UK for priority action. Besides, a Reserve Bank-appointed committee has suggested a host of short-term and long-term measures for internationalisation of Indian rupee, including efforts for inclusion of the Indian currency in IMF’s Special Drawing Rights (SDR) basket. Banking stocks will be in focus ahead of Finance Minister Nirmala Sitharaman’s meeting with the chiefs of public sector banks (PSBs) to review their financial performance later in the day. As per reports, the finance minister is likely to ask the chiefs of public sector banks to focus on the areas highlighted by the Budget, including credit flow to productive sectors. There will be some reaction in FMCG stocks as ratings agency CRISIL said the fast-moving consumer goods (FMCG) sector in India is likely to witness a revenue growth of 7 to 9 per cent in 2023-24 (FY24), marginally lower than 8-9 per cent in the last two years.

The US markets ended lower on Wednesday as investors digested minutes from the US Federal Reserve's latest meeting and braced for significant economic data in the days to come. Asian markets are trading mostly in red on Thursday following overnight losses on Wall Street.

Back home, Indian equity benchmarks ended flat in the volatile session on Wednesday. Key gauges made a cautious start and traded lackluster throughout the day due to weak global cues, driven by concerns over an escalating trade conflict between the US and China. Traders also were cautious with Icra Ratings’ report that states continue to pay higher interest rates to investors for their debt, with the latest weighted average cost rising to 7.46 per cent at Tuesday's auctions wherein nine states raised Rs 16,200 crore. Some concern also came as the growth in India's services sector declined in June owing to inflation. The headline figure in the Purchasing Managers' Index (PMI) survey by credit rating agency S&P Global declined to 58.5 in June from 61.2 in May. This is the lowest level since April when it was 62. However, traders took some support with provisional data from the National Stock Exchange showing that foreign institutional investors (FII) bought shares worth Rs 2,134.33 crore on July 4. Some support came with S&P Global Ratings analyst Neel Gopalakrishnan’s statement that the companies tracked by the global rating agency S&P in India are in good credit shape due to strong underlying growth and accommodative balance sheets. Traders also took a note of report that Finance Minister Nirmala Sitharaman has reviewed progress of implementation of Budget schemes with secretaries of finance ministry and Corporate Affairs Secretary. Besides the review of implementation of various schemes of Union Budget, the minister underlined the importance of continuous assessment of progress to ensure that the schemes are implemented in a time bound manner. Finally, the BSE Sensex fell 33.01 points or 0.05% to 65,446.04 and the CNX Nifty was up by 9.50 points or 0.05% to 19,398.50.

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