Continuing their rally for the third consecutive day, Indian equity benchmarks settled at fresh record closing highs on Friday propelled by foreign fund inflows and a firm trend in the global markets. Intense buying in index heavyweights Mahindra & Mahindra, Infosys and Indusind Bank further bolstered sentiment. After the initial uptick, key gauges gradually inched higher as the day progressed as sentiments got a boost with Reserve Bank Governor Shaktikanta Das' statement that the Indian economy has made a solid recovery and is among the fastest-growing large economies despite heightened uncertainties and formidable headwinds. He said that financial stability is non-negotiable and all stakeholders in the financial system must work to preserve this at all times. Some optimism also came with report that increasing economic ties between India and the US would help boost the country's exports to America. Markets extended gains in second half of trading session as sentiments remained up-beat with S&P Global Ratings Senior Economist (Asia Pacific) Vishrut Rana's statement that Indian economy is expected to clock an average growth rate of 6.7 per cent till 2026-27 fiscal driven by domestic consumption. Additional support also came with Reserve Bank of India's (RBI) bi-annual Financial Stability Report stating that the Indian banking system's asset quality strengthened to a decadal best, with the gross non-performing assets (GNPAs) ratio falling to 3.9 per cent as of March 2023. It said GNPAs of the scheduled commercial banks are expected to improve further to 3.6 per cent by March 2024, as per the baseline scenario. Traders got support after Fitch Ratings said that India's resilient growth outlook will offset a slowdown in overseas markets for the country's corporates and easing input cost pressure will help widen their profit margins. Earlier this month, Fitch had raised India's economic growth forecast to 6.3 per cent for the current fiscal year 2023-24 from the 6 per cent it had predicted previously. Finally, the BSE Sensex rose 803.14 points or 1.26% to 64,718.56 and the CNX Nifty was up by 216.95 points or 1.14% to 19,189.05.

The US markets ended higher on Friday, with the tech-heavy Nasdaq leading the advance, following the release of a Commerce Department report showing an unexpected slowdown in the annual rate of consumer price growth in the month of May. The report said the annual rate of consumer price growth slowed to 3.8 percent in May from 4.3 percent in April. The slowdown surprised economists, who had expected growth to accelerate to 4.6 percent. The annual rate of growth by core consumer prices, which exclude food and energy prices, also slowed to 4.6 percent in May from 4.7 percent in April. Street had expected the pace of growth to be unchanged. The readings on consumer price inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending. On the sectoral front, airline stocks showed a substantial move to the upside on the day, driving the NYSE Arca Airline Index up by 2.0 percent to its best closing level in over a year. Significant strength was also visible among gold stocks, as reflected by the 1.8 percent gain posted by the NYSE Arca Gold Bugs Index. The strength in the gold sector came amid an increase by the price of the precious metal, with gold for August delivery climbing $11.50 to $1,929.40 an ounce. Semiconductor, retail and oil service stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Magnifying previous session's gains, crude oil futures ended higher on Friday as data showing a fall in U.S. crude stocks outweighed demand worries. Lackluster data on China's factory activity also spurred hopes of more policy stimulus. The data showed that manufacturing activity in China shrank for a third straight month in June, albeit at a slower pace. The manufacturing PMI rose to 49.0 in June from 48.8 a month ago -matching expectations. The non-manufacturing sector continued to expand in June, with the corresponding index falling to 53.2 from 54.5 in the previous month. Benchmark crude oil futures for August delivery rose $0.35 or about 0.50 percent to settle at $70.21 a barrel on the New York Mercantile Exchange. Brent crude for August delivery gained $0.59 or 0.79 percent to settle at $74.93 a barrel on London's Intercontinental Exchange.

Rupee settled flat against dollar on Friday despite rally in the domestic equities. Besides, FII inflows into equities failed to cheer the rupee. Traders overlooked Reserve Bank Governor Shaktikanta Das' statement that the Indian economy has made a solid recovery and is among the fastest-growing large economies despite heightened uncertainties and formidable headwinds. He said that financial stability is non-negotiable and all stakeholders in the financial system must work to preserve this at all times. On the global front, Russian rouble slumped to a more than 15-month low against the dollar and euro on Friday, weighed down by domestic political risk concerns after an aborted armed mutiny over the weekend and lacking any support drivers. Finally, the rupee ended flat with previous close of 82.03 on Wednesday.

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 24851.77 crore against gross selling of Rs 10047.90 crore, while in the debt segment, the gross purchase was of Rs 12337.71 crore against gross selling of Rs 508.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.10 crore against gross selling of Rs 47.01 crore.

The US markets ended in green on Friday as investors closed the books on a solid quarter, with data showing progress in the Federal Reserve's efforts to tame inflation. Asian markets are trading mostly higher on Monday as investors digest a slew of manufacturing activity reports from the region. Indian markets ended with solid gains on Friday with robust foreign fund inflows and strong economic data from the U.S. helped ease recession worries. Today, start of the week is likely to be optimistic tracking positive global cues. Foreign fund inflows likely to aid domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) net bought shares worth net Rs 6,397.13 crore on June 30. Sentiments will get a boost as the India Meteorological Department (IMD) in its forecast for July said most areas in central India, adjoining south peninsula, eastern India, and some parts of Northeast and Northwest India will receive normal rainfall during the month. Some support will come as the Ministry of Finance said India's gross GST revenue collection in June stood at Rs 1,61,497 crore, registering a 12 per cent year-on-year rise. Investors will be looking ahead to the Manufacturing PMI data for more cues. However, some cautiousness may come as data updated by Reserve Bank of India (RBI) showed that India's forex reserves fell $2.9 billion and stood at $593.2 billion as of June 23. Traders may take note of the government data showing that India's core sector grew 4.3% in May, unchanged from April as the drag from slower global growth dented the gains from strong government capital expenditure that lifted key sectors like cement and steel. Besides, the central government's fiscal deficit stood at Rs 2.1 lakh crore or 11.8 per cent of the full-year budget estimates at May-end 2023. Meanwhile, in order to push capital expenditure by central ministries, the Finance Ministry has extended the relaxed norms on capex in excess of Rs 500 crore to the second quarter of this fiscal. Public sector banking stocks will be in focus as Finance Minister Nirmala Sitharaman said the public sector banks' (PSBs) profit in the last nine years has tripled to Rs 1.04 lakh crore due to initiatives taken by the government and underlined the need for continuing the momentum to fuel economy. The net profit of PSBs has almost tripled to Rs 1.04 lakh crore in FY23 from Rs 36,270 crore in FY2014.

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

Nifty Top volumes

• HDFC has acquired 612 equity shares of Xanadu Realty representing 5.46% of its paid-up equity share capital. 
• Bajaj Finserv has collaborated with Mobex India for no-cost EMI options on all refurbished products available at Mobex. 
• Reliance Industries and bp have commenced production from the MJ field, following testing and commissioning activities. 
• Tech Mahindra has achieved integration with Microsoft to enable Generative AI Powered Enterprise Search.