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Indian markets ended a range-bound trade in green on Tuesday as investors preferred to stay on the sidelines ahead of US lawmakers' key vote on lifting the debt ceiling for next two years. Today, benchmark indices - NSE Nifty50 and BSE Sensex - are likely to start the session in red amid muted moves across global markets. Market participants likely to remain on sidelines ahead of key Q4 GDP growth data to be out later in the day, which is expected to improve, primarily driven by the manufacturing and services sectors. As per market expectations, the quarterly growth to be between 5-5.5 per cent. Traders will be worried as a private report which flagged concerns regarding the achievement of the fiscal deficit target of 5.9 per cent of gross domestic product (GDP) for the financial year 2023-2024. There will be some cautiousness as Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said hardening interest rates globally and worsening geo-political situation have impacted the foreign direct investment (FDI) inflows into India in 2022-23. However, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) bought shares worth Rs 2,085.62 crore on May 30, provisional data from the National Stock Exchange shows. Some support may come as investment in the Indian capital markets through participatory notes has seen an upward trend in the past two months, with the number reaching Rs 95,911 crore in April-end, primarily driven by the country's robust economic growth. Meanwhile, The Reserve Bank of India is likely to introduce various policy measures in 2023-24 like the guidelines for expected credit loss-based provisioning. IT hardware companies stocks will be in focus with report that the revised IT hardware production-linked incentive (PLI) scheme will include eligibility thresholds on incremental investments and sales, as well as penalties from the payable amount in case of a shortfall in the committed target. There will be some reaction in oil & gas sector stocks as data from the Department of Commerce showed that the country’s overall import of crude oil rose to $162.2 billion in FY23, up from $107.5 billion. This 50.7 per cent rise is attributable to Indian refiners getting access to much larger volumes of Russian crude oil over the past one year at highly discounted prices. Energy related stocks will be in limelight with report that India may cut its import taxes on solar panels in half and is seeking a rollback in goods and services taxes on the devices to make up a shortfall in local output amid rising demand for renewable energy.

The US markets ended mostly in green on Tuesday as traders await legislative approval on the debt ceiling deal. Asian markets are trading lower on Wednesday as government data showed China's factory activity contracted faster than expected in May on weakening demand, adding to concerns over the nation's wobbly economic recovery.

Back home, Indian equity benchmarks, despite facing volatility throughout the day, managed to end higher on Tuesday, helped by foreign fund inflows. Foreign Institutional Investors (FIIs) were net buyers on Monday as they bought equities worth Rs 1,758.16 crore, according to exchange data.  After making a cautious start, markets inched higher as traders took encouragement with the National Sample Survey Office (NSSO) showing that the unemployment rate for persons aged 15 years and above in urban areas declined to 6.8 per cent during January-March 2023 from 8.2 per cent a year ago. Traders also took support with a private report stating that India has emerged as a key source country for Foreign Direct Investment (FDI) in Dubai, one of the wealthiest of the seven emirates in the United Arab Emirates. It ranked among the top five source countries for announced FDI projects and estimated FDI capital. However, markets trimmed most of their initial gains and traded flat in afternoon deals as traders turned cautious with the Department for Promotion of Industry and Internal Trade (DPIIT) data showing that foreign direct investment (FDI) into India declined by 22 per cent to $46 billion in 2022-23, dragged by lower inflows in computer hardware and software, and automobile industry. The FDI inflows stood at $58.77 billion during 2021-22. But, markets regained some traction in late afternoon deals, taking support from a private report stating that the RBI may cut key benchmark policy rate in the fourth quarter of the current calendar year as a mix of factors will allow the central bank to shift focus and adopt a more accommodative policy stance sooner. Adding to the optimism, the Reserve Bank of India in its annual report said that on the back of sound macroeconomic policies and softer commodity prices, India's growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures. Finally, the BSE Sensex surged 122.75 points or 0.20% to 62,969.13 and the CNX Nifty was up by 35.20 points or 0.19% to 18,633.85.

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