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Indian markets came off highs in fag-end of the session and ended flat with positive bias on Tuesday. Today, domestic indices are likely to get pessimistic start following subdued cues from the overseas market as representatives of President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday with no signs of progress. Traders will be concerned with a private report that foreign direct investment (FDI) inflows into the country fell 16% to $71 billion (on a gross basis) during 2022-23 on the back of a weak global economic situation, marking the first decline in a decade. There will be some cautiousness as Moody's said India's GDP has crossed $3.5 trillion in 2022 and will be the fastest-growing G-20 economy over the next few years, but reform and policy barriers could hamper investment. In a research report, it said bureaucracy could slow approval processes in obtaining licences and setting up businesses, prolonging project gestation. However, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth net Rs 182.51 crore on May 23, according to the provisional data available on the NSE. Banking stocks will be in focus with a private report that a key metric of profitability for Indian banks, lending margins, is set to get a boost as the nation’s decision to withdraw its highest-value currency note bolsters bank deposits. There will be some reaction in agriculture related stocks as the Centre ruled out lifting the ban on wheat exports but said the shipments of the foodgrain through diplomatic channels will be considered on a case-to-case basis. India, the world’s second-largest wheat producer, banned wheat exports in May 2022 as part of measures to control rising domestic prices. Meanwhile, Adani Group Shares are likely to remain in focus following a report that US-based GQG Partners has hiked its exposure and willingness to back any of the Adani group's new offerings. Besides, LIC, Adani Green, Nykaa, Oil India, Hindalco, Phoenix Mills, Brigade Enterprises, NALCO, are some of the prominent companies that will announce the March quarter results later in the day.

The US markets ended lower on Tuesday as debt-ceiling negotiations saw no progress. Asian markets are trading in red on Wednesday tracking overnight losses on Wall Street.

Back home, Indian equity benchmarks ended flat with positive bias in the volatile session on Tuesday amid weak trend in global markets. After initial up move, key gauges remained in a narrow range as traders took encouragement with a Reserve Bank of India (RBI) article stating that India’s growth in the April-June quarter is likely to be driven by private consumption, supported by reviving rural demand, and renewed buoyancy in manufacturing. Some support also came as the federal finance ministry in its monthly economic review said that domestic demand will aid India’s economy and help lay the foundation for the capex cycle, despite global headwinds that pose a downside risk to growth. Foreign fund inflows also aided to the markets. Foreign institutional investors (FIIs) bought shares worth Rs 922.89 crore on May 22, provisional data from the National Stock Exchange showed. However, profit booking by investors towards the end capped gains. Traders turned anxious with the finance ministry in its report stating that there are downside risks to growth and upside risks to inflation, partly channelled through the external sector and partially originating from weather uncertainties. It said consumption has shown steady and broad-based growth, while investment in capacity creation and real estate is finding traction. Traders failed to get support with Reserve Bank of India (RBI) governor Shaktikanta Das’ statement that the central bank’s announcement of withdrawal of Rs 2,000 notes will have very marginal impact on the economy because it constitutes only 10.8 per cent of the currency in circulation. Finally, the BSE Sensex rose 18.11 points or 0.03% to 61,981.79 and the CNX Nifty was up by 33.60 points or 0.18% to 18,348.00.  

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