The domestic equity indices ended with small losses after a volatile trading session. PSU Banks declined the most, followed by auto and realty stocks. Investors are awaiting U.S. Federal Reserve policy decision due later in the day.

The S&P BSE Sensex, fell 135.05 points or 0.26% to 52,443.71. The Nifty 50 index lost 37.05 points or 0.24% to 15,709.40.

In the broader market, the S&P BSE Mid-Cap index ended flat while the S&P BSE Small-Cap index fell 0.45%.

Sellers outnumbered the buyers. On the BSE, 1414 shares rose and 1791 shares fell. A total of 128 shares were unchanged.

Meanwhile, Asian markets mostly edged lower as Hong Kong's Hang Seng index struggled to rebound after the Chinese Government actions triggered regulatory fears over sectors such as technology and private education.

Investor sentiment simmered after the International Monetary Fund (IMF), following the RBI and the S&P, revised downwards its forecast for India's GDP in FY22 as it took into account the economic impact of the second pandemic wave.

Economy:

According to Care Ratings, the country's gross domestic product (GDP) growth is likely to be 8.8% to 9% in the current financial year, driven by agriculture and industry sectors. The country's economy had contracted by 7.3% in fiscal 2020-21. The agency said the outlook for the Indian economy on almost all counts in FY22 would look seemingly better than FY21 on account of the negative base effect.

Meanwhile, the second wave of the pandemic has set back economic recovery in India, the IMF said, as it cut the country's growth forecast for the ongoing financial year. India's GDP is estimated to grow by 9.5% in FY22 compared to the 12.5% forecast in April 2021, according to the world economic outlook published by the IMF on Tuesday. For FY23, GDP is estimated to grow by 8.5% compared to 6.9% estimated in April.

The second wave of the pandemic has set back economic recovery in India, the IMF said, as it cut the country's growth forecast for the ongoing financial year.

While the forecast for the global economy remains unchanged from April, prospects for emerging market and developing economies have been marked down for 2021, especially for emerging Asia, according to the note. By contrast, the forecast for advanced economies is revised up.

Economic prospects have diverged further across countries, with vaccine access emerging as the principal fault line along which the global recovery splits into two blocs—almost all advanced economies that can look forward to further normalization of activity later this year and those that will still face resurgent infections and rising COVID-19 death tolls, the IMF said.

Global Markets:

European markets advanced on Wednesday, amid a busy day for major corporate earnings while investors awaited a key policy announcement from the U.S. Federal Reserve. The impact of COVID-19 continues to cloud the market outlook in Europe. The U.K. on Tuesday reported its highest death toll from the virus since March despite falling cases, prompting Prime Minister Boris Johnson to urge caution.

Asian stocks ended mostly lower on Wednesday, with stocks in Hong Kong struggling to recover from a two-day rout. U.S. stocks fell for the first time in six days on Tuesday as a rout in China induced caution and U.S. megacap technology earnings received a mixed response from investors.

Investors are awaiting the Federal Reserve's update on its monetary policy as the central bank's two-day meeting began. The Federal Open Market Committee will release a statement when the meeting concludes Wednesday, followed by Chairman Jerome Powell's news conference.

The International Monetary Fund warned Tuesday that there's a risk inflation will prove to be more than just transitory, pushing central banks to take pre-emptive action.

Earnings Impact:

Maruti Suzuki fell 1.26%. On a consolidated basis, the auto major's net profit stood at Rs 475 crore in Q1 FY22, as compared to a net loss of Rs 268.30 crore posted in Q1 FY21. The profit during the quarter was primarily impacted due to lower sale volumes. Commodity prices increased steeply but the company said it continued to make efforts to reduce costs. Consolidated net sales surged 356.6% to Rs 16,799.90 crore in Q1 FY22 over Rs 3,679 crore in Q1 FY21. Pre-tax profit stood at Rs 596.50 crore in Q1 FY22 as against a pre-tax loss of Rs 369.70 crore in Q1 FY21.

SRF rose 0.78%. The company's consolidated net profit jumped 123% to Rs 395 crore on a 75% rise in revenue from operations to Rs 2,699 crore in Q1 FY22 over Q1 FY21. The company's board has approved a project for integrated expansion of fluorocarbon based refrigerant capacity at Dahej at a projected cost of Rs 550 crore to meet the growing demand for refrigerants in the domestic and exports market. The project is expected to be completed in 24 months.

Dalmia Bharat fell 3.54% to Rs 2165.95. The cement manufacturer's consolidated net profit surged 26.6% to Rs 238 crore on a 36.2% jump in net sales to Rs 2,589 crore in Q1 June 2021 over Q1 June 2020. Sales Volume climbed 33% to 4.89 million tonnes (MT) during the quarter as compared to 3.66 million tonnes (MT) during the same quarter, last year.

Pfizer rose 0.22%. The drug maker posted a 60.6% rise in net profit to Rs 199.9 crore in Q1 FY22 as compared to Rs 124.45 crore reported in Q1 FY21. Revenue from operations stood at Rs 749.17 crore in Q1 FY22, jumping 45.5% year on year from Rs 514.89 crore in Q1 FY21.

Radico Khaitan gained 0.45% to Rs 829.85. The liquor maker posted a 35.7% jump in consolidated net profit to Rs 59.83 crore on a 47.3% rise in net sales to Rs 602.76 crore in Q1 FY22 over Q1 FY21. Total IMFL volume growth was 58.8% year on year. IMFL sales value accounted for 77.7% of total revenue from operations as compared to 73.2% in Q1 FY21.

IDBI Bank fell 0.79%. The bank reported a standalone net profit of Rs 603 crore in Q1 FY22 as against a net profit of Rs 144 crore in Q1 FY21. Total income rose 11.1% to Rs 6,554.95 crore in Q1 FY22 over Q1 FY21. While the bank's net profit as risen by 18%, total income has declined by 5.9% in Q1 FY22 as compared with Q4 FY21.

IndusInd Bank advanced 1.71% to Rs 992.30. The bank's standalone net profit jumped 111.7% to Rs 974.95 crore on a 7.8% rise in total income to Rs 9,355.77 crore in Q1 June 2021 over Q1 June 2020. Provision and Contingencies contracted 18.36% to Rs 1,844.02 crore in Q1 June 2021 over Rs 2,258.88 crore in Q1 June 2020. Provision coverage ratio stood at 72% at 30 June 2021.

Torrent Pharmaceuticals rose 2.67%. The company posted a 2.8% rise in consolidated net profit to Rs 330 crore on a 5.3% rise in net sales to Rs 2,120 crore in Q1 FY22 over Q1 FY21. EBITDA margin improved to 34% in Q1 FY22 from 32% in Q1 FY21.

InterGlobe Aviation (Indigo) declined 2.33%. The airliner's consolidated net loss stood rose to Rs 3,174.18 crore in Q1 FY22, higher than net loss of Rs 2,844.29 crore in Q1 FY21. Consolidated net sales surged 292.2% to Rs 3,006.91 crore in Q1 FY22 over Rs 766.74 crore in Q1 FY21.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 19,53,32,691 with 41,77,436 deaths. India reported 3,99,436 active cases of COVID-19 infection and 4,22,022 deaths while 3,06,63,147 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India reported a single day rise of 43,654 COVID-19 cases and 640 deaths pushing the country's total tally to 3,14,84,605, according to the latest bulletin released by the health ministry on Wednesday.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.189% as compared with 6.178% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.3825, compared with its close of 74.47 during the previous trading session.

MCX Gold futures for 5 August 2021 settlement fell 0.04% to Rs 47,556.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, rose 0.08% to 92.51.

In the commodities market, Brent crude for September 2021 settlement rose 6 cents at $74.54 a barrel. The contract fell 2 cents, or 0.03% to settle at $74.48 a barrel in the previous trading session.

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