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Indian markets closed in red on Tuesday on the back of weakness in index heavyweights – HDFC, HDFC Bank and Reliance Industries. Today, markets are likely to get pessimistic start tracking losses in US equities overnight as Wall Street focus shifts to the ongoing talks on the debt ceiling limit. Mixed corporate results from Indian companies likely to impact the trading sentiments. Traders will be concerned as the India Meteorological Department (IMD) said a slight delay is expected in the onset of the southwest monsoon over Kerala and it is likely to arrive by June 4. Scientists, however, said the delay is unlikely to impact Kharif sowing and total rainfall over the country. The southwest monsoon normally sets in over Kerala on June 1, with a standard deviation of about 7 days. Meanwhile, India and the European Union (EU) have discussed the need to expedite the ongoing trade deal negotiations by finding convergence on all issues on the sidelines of the first ministerial meeting of the India-European Union Trade and Technology Council meeting in Brussels. Insurance industry stocks will be in focus with a private report that the Insurance Regulatory and Development Authority of India (Irdai) has decided to lower the solvency requirement for surety bonds to 1.5 times, from 1.875 times after receiving feedback from the insurance players. There will be some reaction in pharma stocks as the Centre and the pharmaceutical and medical devices industry discussed key issues related to the pricing of drugs and medical devices, including trade margin rationalisation (TMR). Investors await more of financial results from India Inc for domestic cues, with Jubilant Foodworks, Devyani International, Deepak Fertilisers, GSK Pharma, JK Tyre, RailTel Corp, Sterlite Tech, Thermax and others due to post its earnings later in the day.

The US markets ended lower on Tuesday with a disappointing forecast from Home Depot, mixed economic data. Asian markets are trading mixed on Wednesday as Japan's economy grew 1.6 per cent YoY in Q1, above expectations of a 0.7 per cent growth.

Back home, Indian equity benchmarks snapped a two-day winning streak and ended with losses of over half a percent on Tuesday, dragged by Auto, Healthcare and banking stocks. The markets made a cautious start and remained range bound for couple of hours, as traders were anxious with the government data showing that India’s exports contracted by 12.7 per cent, third month in a row, to $34.66 billion in April even as the trade deficit reduced to a 20-month low of $15.24 billion. The decline in exports is mainly on account of poor demand in India’s key destinations - the Europe and the US. Some pessimism also came as a private weather forecaster suggests that southwest monsoon might be delayed and weak, and needs to be watched closely. Markets saw selling pressure in the afternoon session, as sentiments remained down-beat with the commerce ministry data showing that India's exports to the UAE contracted by 22 per cent to $2.23 billion as against $2.86 billion in April. Indian and the UAE have operationalised a comprehensive free trade agreement since May 1 last year. Meanwhile, imports to the UAE also declined by 34.08 per cent to $3.15 billion in April. Traders failed to get support with Commerce and Industry Minister Piyush Goyal’s statement that a free trade agreement between India and four-nation bloc EFTA will help enhance two-way commerce, investment flows, job creation and economic growth. Traders took a note of report that the government has urged the heavy equipment manufacturers to produce such machinery in the domestic market, which will help reduce the country's imports worth over Rs 3,500 crore annually. Finally, the BSE Sensex fell 413.24 points or 0.66% to 61,932.47 and the CNX Nifty was down by 112.35 points or 0.61% to 18,286.50.

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