Indian equity benchmarks extended their winning run to a third day and settled with gains of over a percent on Friday following buying in index majors Tata Steel, Sun Pharma and Bajaj Finserv. Key indices made gap-up opening, as traders took encouragement with the commerce ministry stating that the manufacturing sector attracted foreign direct investments worth $21.34 billion in 2021-22, an increase of 76 per cent year-on-year. Traders took some support with RBI data showing that Bank credit rose by 12.89 per cent to Rs 122.81 lakh crore and deposits by 8.35 per cent to Rs 168.09 lakh crore in the fortnight ended July 15, 2022. Besides, exchange data showed foreign institutional investors (FIIs) became net buyers in the capital markets as they bought shares worth Rs 1,637.69 crore on Thursday. However, markets erased some of the intraday gains in morning deals amid a mixed trend in the global equity markets. But, indices gained traction in final minutes of trade to close around the day's high as sentiments got up-beat with Minister of State in the Ministry of Commerce and Industry Som Parkash's statement that India has received its highest ever FDI inflow of Rs 6,31,050 crores in Financial Year 2021-22. Further, FDI Equity inflow in Manufacturing sectors has increased to Rs 1,58,332 crore in Financial Year 2021-22 from Rs 89,766 crore (FY 2020-21), which is an increase of 76%. Traders took note of Power Minister R K Singh's statement that power deficit came down from 2 per cent in April to 0.4 per cent in May and 0.6 per cent in June despite significant rise in demand of electricity. Finally, the BSE Sensex rose 712.46 points or 1.25% to 57,570.25 and the CNX Nifty was up by 228.65 points or 1.35% to 17,158.25.

Extending their previous session's rally, the US markets ended higher on Friday with notable gains as the tech-heavy Nasdaq reached a nearly three-month closing high, while the Dow and the S&P 500 reached their best closing levels in well over a month. A largely positive reaction to the latest batch of earnings news from big-name companies pushed the indices higher. Shares of Amazon (AMZN) moved sharply higher after the online retail giant reported better than expected second quarter revenues and provided upbeat guidance. Tech giant Apple (AAPL) also showed a strong move to the upside after reporting fiscal third quarter results that exceeded analyst estimates on both the top and bottom lines. On the other hand, shares of Intel (INTC) came under pressure after the semiconductor giant reported weaker than expected second quarter results and provided disappointing guidance for the current quarter. Meanwhile, traders largely shrugged off a report from the Commerce Department showing an acceleration in the pace of consumer price growth. The report showed the annual rate of growth by the personal consumption expenditures price index accelerated to 6.8 percent in June from 6.3 percent in May, showing the fastest growth since January 1982. The annual rate of growth by core consumer prices, which exclude food and energy prices, also accelerated to 4.8 percent in June from 4.7 percent in May. The inflation data, which is said to be preferred by the Federal Reserve, was included in a report showing personal income increased by slightly more than expected in the month of June.  

Crude oil futures settled significantly higher on Friday amid uncertainty that supply from the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, is unlikely to move up any significantly. The OPEC+ is set to meet on August to consider crude output level. According to reports, the group is likely to keep its output unchanged in September. The recent data from the Energy Information Administration (EIA) showing crude inventories in the U.S. fell by 4.5 million barrels in the week ended July 22nd, continued to contribute to the rise in oil prices. Benchmark crude oil futures for September delivery rose $2.20 or 2.3 percent to settle at $98.62 a barrel on the New York Mercantile Exchange. Brent crude for September delivery added $2.87 or 2.87 percent to settle at $110.01 a barrel on London's Intercontinental Exchange.

The rupee ended considerably stronger against US dollar in its second day of gains on Friday amid fresh selling of the American currency by banks and exporters and rally in Indian equities. Traders took encouragement as the commerce ministry said the manufacturing sector attracted foreign direct investments worth $21.34 billion in 2021-22, an increase of 76 per cent year-on-year. On the global front, yen surged on Friday and is on track for its biggest weekly rise in four months against the dollar on bets that U.S. interest rates are nearing a peak after data showed the world's biggest economy unexpectedly contracted in the June quarter. Finally, the rupee ended at 79.24 (provisional), stronger by 45 paisa from its previous close of 79.69 on Thursday.

The FIIs as per Friday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 12072.89 crore against gross selling of Rs 5621.80 crore, while in the debt segment, the gross purchase was of Rs 575.06 crore against gross selling of Rs 1314.50 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.87 crore against gross selling of Rs 8.64 crore.

The US markets ended higher on Friday after investors discarded recession fears. Asian markets are trading mixed on Monday as disappointing Chinese economic data fed doubts last week's rally on Wall Street. Indian markets touched fresh three-month peaks on Friday, surging for the third session in a row, led by gains across most sectors. Today, domestic indices are likely to start new month in green amid supportive global cues and strong inflows from foreign investors. After nine consecutive months of relentless selling, foreign investors have turned net buyers and invested nearly Rs 5,000 crore in Indian equities in July on softening dollar index and good corporate earnings. Traders will be taking encouragement as retail inflation for industrial workers eased to 6.16 per cent in June from 6.97 per cent in May this year due to lower prices of certain food items and petrol. Some support will come as the government data showed that the output of eight core infrastructure sectors expanded by 12.7 per cent in June against 9.4 per cent in the year-ago period. However, some cautiousness may come as RBI data showed that India's foreign exchange reserves declined $1.152 billion to $571.56 billion for the week ended July 22. The reserves has been declining amid continuing volatility in the rupee which has also significantly depreciated against the US dollar. Traders may take note of data from the Controller General of Accounts (CGA) showing that the central government's fiscal deficit touched 21.2 per cent of the annual target in the June quarter as against 18.2 per cent in the year-ago period. In actual terms, the fiscal deficit was at Rs 3.51 trillion at the end of the first quarter of 2022-23. Market participants will be eyeing the manufacturing PMI data to be out later in the day for further cues. This week will be crucial as investors await the Reserve Bank of India's MPC policy decision on Friday. The bi-monthly meet of policymakers is scheduled to start on August 3 and end on August 5. There is expectation that the RBI may go in for its third consecutive policy rate hike by 25-35 basis points to check high retail inflation. There will be some buzz in pharma stocks as Udaya Bhaskar, Director General of Pharmaceuticals Export Promotion Council of India (Pharmexcil), a body under the Department of Commerce said Indian pharma exports registered a growth of eight per cent during the first quarter of the current financial year to $6.26 billion. Sugar industry stocks will be in focus with a private report that the Centre is likely to allow an additional 1.2 million tonnes (MT) of sugar exports in the current season ending September 2022 taking into account higher-than-anticipated domestic production. This additional quota would be over and above 10 MT of sugar exports allowed for the current 2021-22 season. There will be some reaction in stocks related to infrastructure industry as the Ministry of Statistics and Programme Implementation in its latest report stated that as many as 384 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.66 lakh crore. Investors awaited more of corporate earnings from India Inc for domestic cues, with ITC due to post its quarterly numbers later in the day.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Axis Bank and Tata Motors have partnered to offer an exclusive Electric Vehicle Dealer Financing solution to authorized passenger EV dealers. 
• Dr. Reddy's Laboratories has reported 3-fold jump in its consolidated net profit at Rs 1,189 crore for Q1FY23 as compared to Rs 380.40 crore for the same quarter in the previous year. 
• Indian Oil Corporation is planning to invest around Rs 564 crore in various projects in West Bengal this fiscal (FY23). 
• HDFC has reported a rise of 4.95% in its consolidated net profit at Rs 5,574.01 crore for Q1FY23 as compared to Rs 5,310.92 crore for the same quarter in the previous year.