Indian equity benchmarks ended sharply lower on Thursday as weekly F&O expiry and profit booking post the Reserve Bank of India's monetary policy decision put pressure on the indices. Markets made a cautious start but soon gained some traction as foreign fund inflows supported the market sentiments. Provisional data from the National Stock Exchange showed that foreign institutional investors (FIIs) bought shares worth Rs 1,382.57 crore on June 7. Buying further crept in after the Reserve Bank of India's (RBI) monetary policy committee unanimously decided to keep the repo rate unchanged at 6.5 per cent. Besides, RBI retains growth projection at 6.5 per cent for FY24, expects 8 per cent growth in Q1, 6.5 per cent in Q2, 6 per cent in Q3 and 5.7 per cent in Q4. It also lowers retail inflation projection to 5.1 per cent during FY'24 from earlier estimate of 5.2 per cent. Traders also found some support with a private report stating that Consumer price inflation in India likely cooled to a 20-month low in May as food price rises slowed further, drawing closer to the Reserve Bank of India's medium-term target of 4%. Food inflation, which accounts for nearly half of the consumer price index (CPI) basket, eased to 3.84% in April and was expected to have declined further last month. However, markets reversed their initial gains and slipped into red terrain in afternoon deals, as traders turned cautious after the Organization for Economic Co-operation and Development (OECD) marginally raised its 2023-24 (FY24) growth forecast for India to 6 per cent, from 5.9 per cent estimated earlier, while mentioning that weak global demand and the effect of monetary policy tightening will constrain growth in the world's fifth-largest economy in the current fiscal year. The street took a note of a private report stating that India's currency in circulation dropped for a second consecutive week after the central bank withdrew the country's highest value currency note in May, advising people to deposit those with various banks and hoping to help lender deposits in the process. Finally, the BSE Sensex fell 294.32 points or 0.47% to 62,848.64 and the CNX Nifty was down by 91.85 points or 0.49% to 18,634.55.

The US markets ended higher on Thursday on easing concerns about the outlook for interest rates following the release of a Labor Department report showing initial jobless claims increased by much more than expected last week. The Labor Department said initial jobless claims climbed to 261,000 in the week ended June 3rd, an increase of 28,000 from the previous week's revised level of 233,000. Street had expected jobless claims to inch up to 235,000 from the 232,000 originally reported for the previous week. With the much bigger than expected advance, jobless claims reached their highest level since hitting 264,000 in the week ended October 30, 2021. Traders took note of report that the Commerce Department showed a slight decrease in U.S. wholesale inventories in the month of April. The Commerce Department said wholesale inventories edged down by 0.1 percent in April after dipping by a revised 0.2 percent in March. Street had expected wholesale inventories to slip by 0.2 percent compared to the unchanged reading originally reported for the previous month. The modest decrease in wholesale inventories came as inventories of non-durable goods tumbled by 1.2 percent, more than offsetting a 0.6 percent increase in inventories of durable goods. On the sectoral front, Retail stocks showed a strong move back to the upside after falling sharply on Wednesday, driving the Dow Jones U.S. Retail Index up by 1.4 percent. Significant strength was also visible among pharmaceutical stocks, as reflected by the 1.2 percent gain posted by the NYSE Arca Pharmaceutical Index.

Crude oil futures pared some losses and ended lower on Thursday, after falling by more than $3 a barrel in early trade, after the White House called a news report that the U.S. and Iran may be approaching a deal on oil exports false. Oil prices fell sharply in early trade after private report stated Iran and the U.S. are nearing a temporary deal that would swap some sanctions relief for reducing Iranian uranium enrichment activities. Besides, concerns about the outlook for energy demand continued to weigh on the markets, keeping the price of crude oil stuck firmly in the red. Benchmark crude oil futures for July delivery fell $1.24 or about 1.7 percent to settle at $71.29 a barrel on the New York Mercantile Exchange. Brent crude for August delivery dropped $0.99 or 1.27 percent to settle at $75.96 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Thursday even after the Reserve Bank kept the key interest rate unchanged. The Reserve Bank of India, in its second bi-monthly policy for FY24, has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent for second time in a row. The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. On the global front, dollar fell slightly on Thursday from near three-month highs, a day after a surprise rate hike from the Bank of Canada suggested the Federal Reserve may also have more work to do to combat inflation. Finally, the rupee ended at 82.57 (Provisional), weaker by 5 paise from its previous close of 82.52 on Wednesday.

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 9609.15 crore against gross selling of Rs 8165.16 crore, while in the debt segment, the gross purchase was of Rs 377.10 crore against gross selling of Rs 227.92 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.19 crore against gross selling of Rs 8.91 crore.

The US markets ended higher on Thursday regaining some of their momentum thanks to a rebound by technology stocks. Asian markets are trading mixed on Friday amid data showing that China's consumer prices increased slightly in May while factory-gate prices continued to contract. Indian markets surrendered early gains to close with losses on Thursday, as investors pared exposure to auto, bank and IT stocks after the RBI left its key interest rate unchanged. Today, in line with firm trade on Wall Street overnight, the local benchmark indices likely to open in green. Investors now will shift the focus to upcoming domestic and US inflation data and Fed policy. Foreign fund inflows likely to support domestic sentiments. Foreign portfolio investors (FPIs) net purchased Indian shares worth Rs 212.40 crore on June 08, according to provisional exchange data. Some support will come with report that monsoon rain reached the coast of India's southernmost Kerala state on Thursday, offering relief to farmers after a delay of more than a week, marking its latest arrival in four years. Besides, Associated Chambers of Commerce and Industry of India (ASSOCHAM) stated that the Reserve Bank of India's decision to keep the benchmark interest rates unchanged is on the expected lines, and added that the focus of the monetary policy is clearly on further taming inflation for a stable growth. Traders may take note of Additional Director General of Foreign Trade (DGFT) S C Aggarwal's statement that a robust and easy trade finance ecosystem is important for India to achieve the $2 trillion exports target by 2030. It said easy availability of affordable trade finance helps promote export competitiveness. Meanwhile, the Reserve Bank came out with guidelines on default loss guarantee (DLG) in digital lending, a move aimed at ensuring the orderly development of the credit delivery system. Moreover, the Customs Department will introduce additional disclosures for the export and import of medicinal products from July 1 to fast-track clearances of shipments. Stocks related to railways stocks with report that the Ministry of Railways has reported an earning of Rs 14642 crore from freight loading in May 2023, a four per cent increase compared to last year at Rs 14,084 crore. The freight loading amount reported in May 2023 is also two per cent more than last year at 134 million tonnes (mt). It was 131 mt last year.

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

Nifty Top volumes

• ONGC has signed a MoU with Iceland GeoSurvey, taking a significant step towards the exploration and development of geothermal energy in India. 
• Axis Bank has dealt its first onshore INR Non Deliverable Derivative trade with a large South based domestic corporate client. 
• M&M has entered the dual-fuel segment in the small commercial vehicle space with the launch of Supro CNG Duo priced at Rs 6.32 lakh (ex-showroom Delhi).
• Bharti Airtel has surpassed the 2 million unique 5G user mark on its network in Bihar and Jharkhand.