Indian equity benchmarks swung between gains and losses throughout the day and ended on flat note on Friday as global markets were largely under selling pressure ahead of the release of US job data, which could provide insight into upcoming Fed actions. After making positive start, key gauges slipped into red terrain as traders turned cautious 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. Some concern also came as 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. However, key gauges erased all the losses to turn positive in noon session, as traders found some solace with Nitin Gupta, chairman of the Central Board of Direct Taxes (CBDT) stating that 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 also came with the Reserve Bank of India (RBI) in its latest monthly data on India's International Trade in Services showed that the country's services exports increased by 20.2 per cent year-on-year to $23.26 billion in July 2022. However, the July exports were lower than $25.29 billion in June this fiscal. But, markets failed to hold gains and ended flat amid a private report stating that India's current account deficit (CAD) may hit a nine-year high in the June quarter of FY23 with the net exports ratio touching 5.3 per cent of gross domestic product (GDP) in the first quarter, Some pessimism also came after another report stated that though investments as a percentage of gross domestic product (GDP) rose year-on-year in the first quarter of 2022-23 (Q1FY23), they are still below the 30 per cent mark that is required to put the economy on a sustained growth path. Finally, the BSE Sensex rose 36.74 points or 0.06% to 58,803.33 and the CNX Nifty was down by 3.35 points or 0.02% to 17,539.45.

The US markets erased their early gains and settled sharply lower on Friday with cut of over a percent each following the release of a closely watched Labor Department report. The US employment increased roughly in line with street estimates in the month of August. The report showed non-farm payroll employment rose by 315,000 jobs in August after surging by a revised 526,000 jobs in July. Street had expected employment to increase by about 300,000 jobs compared to the jump of 528,000 jobs originally reported for the previous month. Meanwhile, the Labor Department said the unemployment rate edged up to 3.7 percent in August from 3.5 percent in July. Street had expected the unemployment rate to remain unchanged. The unexpected uptick by the unemployment rate came as the labor force increased by 786,000 persons, more than outpacing the 442,000-person growth in the household measure of employment. As separate report by the Commerce Department unexpectedly showed a sharp pullback in new orders for U.S. manufactured goods in the month of July. The Commerce Department said factory orders slumped by 1.0 percent in July after surging by a revised 1.8 percent in June. On the sectoral front, pharmaceutical stocks came under pressure, dragging NYSE Arca Pharmaceutical Index down by 1.6 percent. Considerable weakness also emerged among healthcare stocks, as reflected by the 1.5 percent drop by the Dow Jones U.S. Health Care Index. Commercial real estate, transportation and banking stocks also moved to the downside, while gold and energy stocks rebounded along with the prices of the respective commodities.   

Crude oil futures ended higher on Friday amid rising prospects for a reduction in output from the Organization of the Petroleum Exporting Countries and allies. The Saudi-led Organization of the Petroleum Exporting Countries and its allies led by Russia, together known as OPEC+, will meet on Monday. According to a report released by Baker Hughes, the number of active U.S. rigs drilling for oil fell by nine to 596 this week. The report said the total active rig count in the U.S., including those drilling for natural gas, declined by five to 760. Benchmark crude oil futures for October delivery rose $0.26 or about 0.3 percent to settle at $86.87 a barrel on the New York Mercantile Exchange. Brent crude for November delivery added $0.66 or about 0.7 percent to settle at $93.02 a barrel on London's Intercontinental Exchange.          

Indian rupee ended weaker against the US dollar on Friday, on increased demand for the greenback from importers and banks. Sentiments were dented 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. More pessimism came as foreign institutional investors (FIIs) have net sold shares worth Rs 2,290.31 crore on September 1. On the global front, pound steadied on Friday as some calm returned at the end of a bruising week in which concerns about the UK's deteriorating economic outlook, the policy direction under a new prime minister and demand for dollars all hurt the British currency. Finally, the rupee ended at 79.87 (Provisional), weaker by 31 paisa from its previous close of 79.56 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 11695.52 crore against gross selling of Rs 13992.51 crore, while in the debt segment, the gross purchase was of Rs 1819.38 crore against gross selling of Rs 1691.60 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.82 crore against gross selling of Rs 19.95 crore.

The US markets ended lower on Friday as early gains from a jobs report that showed a labor market that may be starting to loosen gave way to worries about the European gas crisis. Asian markets are trading mostly in red on Monday after Russia shut a major gas pipeline to Europe, leading some governments there to announce emergency measures to ease the pain of soaring energy prices. Swinging occasionally between gains and losses, Indian markets remained sluggish on Friday, as lack of domestic and global cues kept investors on the sideline. Today, markets are likely to start new week on flat-to-negative note amid weakness in global markets. Traders will be concerned as a preliminary data released by the commerce ministry showed that India's exports contracted by 1.15 per cent to $33 billion and trade deficit more than doubled to 28.68 billion in August. Trade deficit in August 2021 stood at 11.71 billion. Imports rose by 37 per cent to $61.68 billion in August this year. There will be some cautiousness as former RBI governor D Subbarao said India's GDP growth of 13.5 per cent in the April-June quarter of 2022-23 has turned out be a cause for disappointment and concern, as there was expectation of a bigger bounce back from the first quarter of last year when economic activity was crippled by the Delta wave of COVID-19. Besides, the Reserve Bank of India (RBI) data showed the country's foreign exchange reserves declined by $3.007 billion to $561.046 billion in the week ended August 26. In the previous week ended August 19, the reserves had dipped by $6.687 billion to $564.053 billion. However, some respite may come as hoping for a double-digit growth in GDP in this financial year, Union Finance Minister Nirmala Sitharaman said the nation is on a strong wicket when compared to others, and is responsive in terms of extending hand-holding to the required sections. She added that the country has zero per cent chance of slipping into recession. Some support may come with report that foreign investors have pumped in a little over Rs 51,200 crore into the Indian equity markets in August, making it the highest inflow in 20 months, amid improving risk sentiment and stabilisation in oil prices. Traders may be taking encouragement as a State Bank of India report stated India is likely to become the third largest economy by 2029 -- up seven places since 2014 when the country was ranked 10th. India is currently ranked fifth largest economy. Traders may take note of a recent report by the Department of Economic Affairs, under the Union Finance Ministry, stating that India's external debt of $620.7 billion, as at end of March 2022, is sustainable and is being managed in a prudent manner. Metal stocks will be in focus as Icra said it expects steel prices to remain under pressure in the country over the near future as the prices in the domestic market cannot be cushioned from the global trends. There will be some reaction in railways stocks with a private report that Indian Railways' freight earnings touched Rs 12,926 crore in August, fuelled by increased coal supply to meet the record power demand. The national transporter carried 119 million tonnes (mt) of goods and raw materials during last month, growing by 7.9 per cent year-on-year (YoY). Meanwhile, Tamilnad Mercantile Bank's IPO will open for subscription today in the price band of Rs 520 - 525. The bank aims to raise up to Rs 825 crore from its maiden share sale.

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

Nifty Top volumes

• Infosys has completed the acquisition of BASE life science, a leading technology and consulting firm in the life sciences industry, in Europe. 
• IOC has partnered with Fiserv, Inc. to enhance customer payment experiences and streamline its operations. 
• IndusInd Bank has entered into strategic partnership with Asian Development Bank to support and promote Supply Chain Finance solutions in India. 
• Tata Motors' total sales increased by 36% to 78,843 units in August 2022. The company had sold 57,995 units in the same month of the previous year.