Indian equity benchmarks continued their downward trend for the third consecutive session on Thursday in tandem with a bearish trend in global markets. Markets made a negative start and continued to drift lower throughout the day as traders got anxious with exchange data showing that foreign institutional investors (FIIs) offloaded equities worth Rs 1,877.84 crore on Wednesday. Sentiments remained down-beat even as data released by S&P Global showed that India's services activity spiked sharply to 62.3 in July from a Purchasing Managers' Index (PMI) of 58.5 in June. At 62.3, the July services PMI is the highest print in over 13 years. The last time it was higher was in June 2010. It has also stayed above the key level of 50 that separates expansion in activity from a contraction for 24 months in a row. Markets extended fall in afternoon deals, amid a private report stating that with inflation inching up, the Reserve Bank of India is likely to maintain the status quo on key interest rates. The six-member Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, will hold the meeting from August 8 to 10. However, key indices managed to cut some losses in final hour of trade, taking support from private report that upgraded India's status to overweight as it believes that the country's reform and macro-stability agenda supports a strong capex and profit outlook. An overweight rating means that it expects India's economy to perform better in the future. The upgrade in the backdrop of US losing AAA status and economic slowdown in China. Meanwhile, the Goods and Services Tax (GST) Council has decided to implement a 28 per cent tax on electronic gaming, casinos, and horse racing, but this would be applied on the initial amount paid upon entry, and not on the total value of each bet placed. The proposed amendments are likely to be introduced from October 1, with a comprehensive review to be conducted six months after implementation. Finally, the BSE Sensex fell 542.10 points or 0.82% to 65,240.68 and the CNX Nifty was down by 144.90 points or 0.74% to 19,381.65.

The US markets ended lower on Thursday. The weakness on markets partly reflected continued concerns about U.S. debt after credit rating agency Fitch Ratings unexpectedly downgraded the United States' credit rating on Tuesday. Cautiousness prevailed in the markets as a report released by the Labor Department showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended July 29th. The Labor Department said initial jobless claims crept up to 227,000, an increase of 6,000 from the previous week's unrevised level of 221,000. The uptick in jobless claims matched street estimates. Meanwhile, the report said the less volatile four-week moving average edged down to 228,250, a decrease of 5,500 from the previous week's unrevised average of 233,750. Besides, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in U.S. service sector activity in the month of July. The ISM said its services PMI slipped to 52.7 in July from 53.9 in June, although a reading above 50 still indicates growth. Street had expected the index to edge down to 53.0. The modest decrease by the headline index partly reflected a slowdown in the pace of growth in business activity, with the business activity index falling to 57.1 in July from 59.2 in June. On the sectoral front, Despite the lackluster performance by the broader markets, airline stocks showed a substantial move to the downside, dragging the NYSE Arca Airline Index down by 3.2 percent to its lowest closing level in almost two months.

Crude oil futures ended higher on Thursday after Saudi Arabia announced that it would extend its production cut to next month. The move by Saudi Arabia to extend its voluntary oil output cut of 1 million barrels per day for a third month triggered hectic short-covering in the futures contract, and helped the commodity regain the ground it had lost in the previous session. oil prices were also supported by comments from Russia's Deputy Prime Minister Alexander Novak that Russia would cut oil exports by 300,000 bpd in September. Benchmark crude oil futures for September delivery rose $2.06 or about 2.6 percent to settle at $81.66 a barrel on the New York Mercantile Exchange. Brent crude for October delivery surged $1.94 or 2.33 percent to settle at $85.14 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Thursday amid weak domestic equities and a stronger greenback in the overseas market. Sustained foreign fund outflows and firm crude oil prices further dented sentiments. Traders were cautious amid a private report stating that with inflation inching up, the Reserve Bank of India is likely to maintain the status quo on key interest rates. The six-member Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, will hold the meeting from August 8 to 10. Investors ignored report stating that India's services sector expanded at its fastest pace in over 13 years in the month of July, aided by substantial improvement in international demand. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index jumped at 62.3 in July from 58.5 in June. On the global front, the dollar scaled a four-week peak against major peers on Thursday after upbeat labour market data a day earlier, while sterling edged lower ahead of an expected rate hike from the Bank of England. Finally, the rupee ended at 82.74 (Provisional), weaker by 7 paise from its previous close of 82.67 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 8521.59 crore against gross selling of Rs 10023.43 crore, while in the debt segment, the gross purchase was of Rs 284.95 crore with gross sales of Rs 269.95 crore. Besides, in the hybrid segment, the gross buying was of Rs 676.42 crore against gross selling of Rs 12.08 crore.

The US markets ended lower on Thursday after a surge in Treasury yields and mixed economic readings. Asian markets are trading mixed on Friday as rising bond yields continue to put pressure on equities. Indian markets ended lower on Thursday amid a broad risk aversion in global financial markets. Today, start of the session is likely to be optimistic. Sentiments will get a boost with the finance ministry in a report stated that growth momentum gathered in the January-March quarter will be sustained in the April-June quarter of the current financial year amid the strengthening of the current account balance. Some support will come as an S&P Global report said India can become a $6.7 trillion economy by 2031, from $3.4 trillion currently, if the country clocks an average growth of 6.7 per cent for 7 years. It said but a global slowdown and lagged effect of a policy rate hike by RBI could slow down growth to 6 per cent in the current fiscal. Traders may take note of Chief Economic Advisor V Anantha Nageswaran said India needs to focus on the manufacturing sector to achieve sustained growth of 7-7.5 per cent until 2030. Besides, the Employees' Provident Fund Organisation received a total contribution of Rs 64885.60 crore during 2022-23, the highest ever under its Employees' Pension Scheme. However, upside may remain capped amid as a cautious undertone may prevail ahead of the U.S. jobs report due later in the day that could offer more clues on the Federal Reserve's rate-hike path. Foreign fund outflows likely to dent domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) offloaded shares worth Rs 317.46 crore on August 3. Meanwhile, India Inc's April-June quarter (Q1FY24) results for fiscal year 2023-24 will be tracked by investors. Companies such as SBI, M&M, Britannia, Fortis Healthcare, Delhivery and BHEL, are some of the notable names to report Q1 results on Friday, August 4.

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

Nifty Top volumes

• Ultratech Cement has entered into share subscription and shareholders agreement and energy offtake agreement with M/s VEH Radiant Energy for the purposes of acquiring 26% equity shares of VEH Radiant. 
• TCS is now offering its TCS Neural Manufacturing suite of solutions on the newly launched Microsoft Cloud for Manufacturing, to help manufacturers accelerate their growth and transformation. 
• IndusInd Bank and Tiger Fintech (a Bajaj Capital Group company) have launched the IndusInd Bank Tiger Credit Card, a co-branded credit card powered by Visa. 
• JSW Steel has entered into a joint venture agreement with JFE Steel Corporation on August 2, 2023 for the purposes of establishing a joint venture company in India.