Indian equity benchmarks ended lower on Thursday with Sensex and Nifty settling below 58,800 and 17,550 mark respectively, mainly dragged by telecom, realty and industrials stocks amid weak global cues. Markets made gap-down opening and traded under pressure throughout the day, as India's gross domestic product (GDP) rose 13.5% year-on-year (y-o-y) in the April-June period. Though, it is the fastest annual expansion in a year, it was lower than the predictions made by the Reserve Bank of India (RBI; 16.2 per cent) and other market participants. Traders were concerned as the data of the Department for Promotion of Industry and Internal Trade (DPIIT) showed that Foreign Direct Investment (FDI) equity inflows into India contracted by 6% to $16.59 billion during the April-June quarter this fiscal. However, markets recovered much of their initial losses in morning deals, taking support from Finance Secretary T V Somanathan's statement that the government is confident that India's real gross domestic product (GDP) growth will exceed 7 per cent in 2022-23 (FY23). This will make it the world's fastest-growing major economy. But, key gauges failed to hold recovery and fell sharply in late afternoon deals, as some pessimism remained among traders as report stated that India's manufacturing activity improved again in August, although S&P Global's Purchasing Managers' Index (PMI) edged down to 56.2 from the eight-month high of 56.4 recorded in July. Market participants  remained cautious as Moody's Investors Service has lowered its gross domestic product (GDP) growth forecast for India to 7.7 percent for the calendar year 2022 (CY22). The global credit rating agency also lowered India's GDP forecast for CY23 to 5.2 percent from 5.4 percent. Adding more worries, the output of eight core infrastructure sectors contracted to six-month low of 4.5 per cent in July 2022 against 9.9 per cent in the year-ago period. The production growth of eight infrastructure sectors was 13.2 per cent in June 2022. Finally, the BSE Sensex fell 770.48 points or 1.29% to 58,766.59 and the CNX Nifty was down by 216.50 points or 1.22% to 17,542.80.

The US markets ended mostly higher on Thursday as traders picked up stocks at reduced levels. Some support came in as the Labor Department released a report unexpectedly showing a modest decrease in first-time claims for US unemployment benefits in the week ended August 27th. The report showed initial jobless claims edged down to 232,000, a decrease of 5,000 from the previous week's revised level of 237,000. The dip came as a surprise to participants, who had expected jobless claims to inch up to 248,000 from the 243,000 originally reported for the previous week. However, upside remained capped on lingering concerns about higher interest rates and the impact on the global economy, which have weighed on the markets for the past several sessions. Weakness also prevailed in the markets as the Commerce Department released a report showing US construction spending fell by more than expected in the month of July. The report showed construction spending dropped 0.4 percent to an annual rate of $1.777 trillion in July after falling by 0.5 percent to a revised rate of $1.784 trillion in June. Street had expected construction spending to edge down by 0.1 percent compared to the 1.1 percent slump originally reported for the previous month. On the sectoral front, Considerable strength emerged among healthcare and pharmaceutical stocks, with the Dow Jones US Health Care Index and the NYSE Arca Pharmaceutical Index both climbing by 1.5 percent. Utilities and retail stocks also moved notably higher as the day progressed, contributing to the recovery by the broader markets.   

Crude oil futures ended lower on Thursday, magnifying their previous session's losses, on rising concerns about the outlook for energy demand due to worries about a recession and on reports showing a surge in Covid-19 cases in China. Further, oil prices dropped on worries that aggressive rate hikes by major central banks may lead to a global economic slowdown and dent fuel demand. Besides, the dollar's sharp uptick on rate hike concerns also hurt oil prices. The dollar index rose to a fresh 20-year high at $109.98 before paring some gains. Benchmark crude oil futures for October delivery fell $2.94 or about 3.3 percent to settle at $86.61 a barrel on the New York Mercantile Exchange. Brent crude for November delivery dropped $2.78 or 2.92 percent to settle at $92.36 a barrel on London's Intercontinental Exchange.        

Erasing initial gains, rupee ended weaker against dollar on Thursday due to lower-than-expected gross domestic product (GDP) data. Among macro-economic data, India's gross domestic product (GDP) rose 13.5% year-on-year (y-o-y) in the April-June period. Though, it is the fastest annual expansion in a year, it was lower than the predictions made by the Reserve Bank of India (RBI; 16.2 per cent) and other market participants. Traders were also worried as S&P Global's Purchasing Managers' Index (PMI) edged down to 56.2 from the eight-month high of 56.4 recorded in July. Adding more worries, the output of eight core infrastructure sectors contracted to six-month low of 4.5 per cent in July 2022 against 9.9 per cent in the year-ago period. On the global front, sterling fell against the dollar on Thursday, adding to August losses that were its worst since late 2016, as storm clouds gather over the British economy. Finally, the rupee ended at 79.56 (Provisional), weaker by 4 paisa from its previous close of 79.52 on Tuesday.

The FIIs as per Thursday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 16124.60 crore against gross selling of Rs 11864.93 crore, while in the debt segment, the gross purchase was of Rs 647.93 crore against gross selling of Rs 656.91 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.57 crore against gross selling of Rs 14.94 crore.

The US markets ended mostly in green on Thursday with investor focus turning to a key report on the labor market on Friday. Asian markets are trading mixed on Friday amid new China lockdowns. Indian markets fell on Thursday on weaker-than-expected domestic Q1FY23 GDP data along with marginal downtick in Manufacturing PMI for August, worried market participants. Today, markets are likely to get flat-to-positive start amid mixed cues from Asian peers. Some optimism will come as Nitin Gupta, chairman of the Central Board of Direct Taxes (CBDT) said the Centre's direct tax collection as on August 30 stood at Rs 4.8 trillion, which is 33 per cent more than the Rs 3.6 trillion collected in the same period last year. Gupta said if the trend continued, direct tax collection for FY23 could exceed the Budget target of Rs 14.20 trillion. Some support will come as Reserve Bank data showed that India's services exports increased by 20.2 per cent year-on-year to $23.26 billion in July. Besides, India collected Rs 1.44 lakh crore in Goods and Services Tax (GST) in August, registering an increase of 28 percent from the mop-up a year back, the finance ministry said on September 1. However, when compared to the money collected in July, the August GST mop-up was 4 percent lower. There may be some cautiousness as chief economist at State Bank of India revised downward the full-year growth forecast to a low 6.8 per cent from 7.5 per cent earlier for FY2023, citing the way below GDP numbers for the first quarter. Traders may be concerned as the Consumer Pyramid Household Survey of the Centre for Monitoring Indian Economy showed that the employment rate among Indian youth (15-24 years) stood at 10.4% in 2021-22 compared to 10.9% in 2020-21. This is much lower when compared to the World Bank estimates of 23.2% for 2020. Meanwhile, foreign institutional investors (FIIs) have net sold shares worth Rs 2,290.31 crore on September 1, as per provisional data available on the NSE. Power stocks will be in focus as the power ministry data showed that India's power consumption grew marginally by nearly 2 per cent year-on-year to 130.35 billion units (BU) in August 2022. Power consumption in August last year was recorded at 127.88 BU, higher than 109.21 BU in the same month of 2020. There will be some reaction in EV manufacturing companies stocks credit rating agency, Icra said investments in cell manufacturing are expected to exceed $9 billion by 2030 given the incremental demand from various applications and future growth prospects expected post 2030. There will be some buzz in sugar industry stocks with a private report that India is set to allow sugar exports in two tranches for the next season beginning in October, as the world's biggest producer of the sweetener tries to balance the interests of its farmers and consumers. Auto stocks will be in limelight with a private report that India's auto sector demonstrated healthy growth rising to record levels in August year-on-year as shortage of semiconductors eased further helping companies to step up production ahead of the crucial festive season that kicked in with Ganesh Chaturthi on August 31.

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

Nifty Top volumes

• Reliance Industries has acquired the home-grown soft drink brand Campa from Delhi-based Pure Drinks Group. The deal is estimated to be around Rs 22 crore. 
• Power Grid Corporation of India has been declared as the successful bidder for System Strengthening Scheme for Eastern and North Eastern Regions on BOOT basis.
• Cipla's wholly owned subsidiary in UK -- Cipla (EU) is all set to acquire an additional 13.10% stake in Cipla (Jiangsu) Pharmaceutical, a subsidiary of Cipla EU in China.
• State Bank of India is planning to sell non-performing loan account of Anamika Conductors through e-bidding in late September to recover dues of Rs 102 crore.