Indian equity benchmarks ended at record closing highs in the volatile session on Friday on the back of positive global cues. Markets made an optimistic start and stayed in green for most part of the day as sentiments got a boost with Union minister Rajeev Chandrasekhar stating that the digital economy will contribute 20 per cent of India's gross domestic product (GDP) by 2026. Chandrasekhar asserted that India has now become the fastest growing digital economy in the world. Buying further crept in after the Monetary Policy Committee of the Reserve Bank of India (RBI) in its December review meeting unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, thus maintaining status quo for the fifth straight time. It also raised FY24 GDP projection to 7% from 6.5% earlier while leaving inflation projection for FY24 unchanged at 5.4%. However, benchmark indices erased gains and traded marginally in red in late afternoon deals, as traders turned cautious amid a private report stating that India's retail inflation likely picked up in November due to higher food prices after declining for three months, bringing it closer to the upper end of the Reserve Bank of India's (RBI) 2 percent-6 percent target range. Some concern also came with another report stating that India's fuel consumption in November fell after hitting a four month peak in the previous month, hit by reduced travel in the world's third biggest oil consumer as a festive boost fizzled out. But, selling proved short-lived as markets regained some traction to end higher as traders found solace with Finance Minister Nirmala Sitharaman's statement that India continues to maintain the momentum of the fastest-growing major economy, with all sectors contributing significantly in economic activities. Adding to the optimism, Fitch Ratings said India's expanding consumer market and vast labour force can make it an alternative destination to China as part of countries' supply chain diversification. Finally, the BSE Sensex rose 303.91 points or 0.44% to 69,825.60 and the CNX Nifty was up by 68.25 points or 0.33% to 20,969.40.

The US markets ended higher on Friday after a report released by the University of Michigan showed a significantly bigger than expected improvement in U.S. consumer sentiment in the month of December. The University of Michigan said its consumer sentiment index surged to 69.4 in December from 61.3 in November. Street had expected the index to inch up to 62.0. The jump by the headline index came as current economic conditions index shot up to 74.0 in December from 68.3 in November, while the index of consumer expectations spiked to 66.4 from 56.8. The report also showed a sharp pullback in year-ahead inflation expectations, which plunged to 3.1 percent in December from 4.5 percent in November. Year-ahead inflation expectations are now at their lowest level since March 2021 and sit just above the 2.3-3.0 percent range seen in the two years prior to the pandemic. Meanwhile, employment in the U.S. increased by more than expected in the month of November, according to a highly anticipated report released by the Labor Department. The report said non-farm payroll employment jumped by 199,000 jobs in November after rising by 150,000 jobs in October. Street had expected employment to climb by 180,000 jobs. On the sectoral front, Computer hardware stocks turned in a strong performance on the day, resulting in a 1.7 percent advance by the NYSE Arca Computer Hardware Index. Significant strength was also visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index climbing by 1.5 percent and 1.4 percent, respectively.

Crude oil futures ended sharply higher on Friday after Saudi Arabia and Russia urged all the members of the OPEC+ group to join an output cut agreement. Further, stronger than expected U.S. non-farm payroll employment data, the drop in unemployment rate, and a report showing a notable improvement in U.S. consumer sentiment contributed as well to the uptick in oil prices. Benchmark crude oil futures for January delivery rose $1.89 or about 2.7 percent to settle at $71.23 a barrel on the New York Mercantile Exchange. Brent crude for February delivery surged $1.79 or about 2.42 percent to settle at $75.84 a barrel on London's Intercontinental Exchange.

Indian rupee ended lower on Friday despite Reserve Bank of India kept the policy rate unchanged at 6.5%. Traders ignored report that India's foreign exchange reserves increased to $604 billion as on December 1, surpassing the $600 billion mark after a gap of about four months. The forex reserves were last above the $600 billion mark on August 11 this year. Besides, Reserve bank governor Shaktikanta Das said that the Indian rupee has exhibited low volatility compared to emerging market economy (EME) peers in the calendar year 2023, despite elevated US treasury yields and a stronger US dollar. On the global front, yen headed for a fourth weekly gain against the dollar on Friday, after its biggest rally in almost a year the day before, driven by a burst of optimism among traders that Japan's ultra-low rates policy may be nearing an end. Finally, the rupee ended at 83.39 (Provisional), weaker by 3 paise from its previous close of 83.36 on Thursday.

The FIIs as per Friday'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 13450.81 crore against gross selling of Rs 13904.47 crore, while in the debt segment, the gross purchase was of Rs 1458.41 crore with gross sales of Rs 436.68 crore. Besides, in the hybrid segment, the gross buying was of Rs 45.04 crore against gross selling of Rs 38.38 crore.

The US markets ended higher on Friday after a robust US jobs report fueled investor optimism about a soft landing for the economy. Asian markets are trading mixed on Monday as China's headline inflation fell at the fastest pace in 3 years, keeping deflationary pressures in focus. Indian markets ended at record highs on Friday, despite of some volatility post RBI policy announcement. The Reserve Bank of India's Monetary Policy Committee decides to keep the repo rate unchanged at 6.5%. Today, markets are likely to get a cautious start amid mixed cues from Asian counterparts. Investors are likely to remain on sidelines ahead of macro-economic data to be out later in the week. Some cautiousness may come as the Reserve Bank of India's (RBI's) forward looking surveys showed that households expect some rise in price and inflationary pressures across major product groups for the year ahead. Consumers retained negative sentiments on both the current and future price conditions. Expectations regarding overall prices and inflation over the next three months were more aligned with those of food products and services. However, some respite may come as Union minister Piyush Goyal said India is aiming to achieve the $2 trillion export target by 2030 and in the process it is moving this industry out of the government support to make it self-sustaining and cost competitive. Traders may be taking encouragement as Chief Economic Advisor V Anantha Nageswaran said India's economic growth can become faster if the much-awaited private capital formation kicks into higher gear. Also, Union Home Minister Amit Shah said India will become a $5 trillion economy by the end of 2025. Some support will come as foreign portfolio investors (FPIs) injected Rs 26,505 crore into the Indian equity markets in the first six trading sessions of this month on expectations of political stability after the BJP stormed to power in three major states and robust economic growth. Besides, India's foreign exchange reserves increased to $604 billion as on December 1, surpassing the $600 billion mark after a gap of about four months. Meanwhile, Governor Shaktikanta Das ruled out loosening interest rates, saying inflation remains top priority as a few months of good data should not lead to complacency, even as the Reserve Bank kept key policy rates unchanged for the fifth consecutive time. Stocks related to agriculture commodities will be in focus as data from agri-export promotion body APEDA showed that export of agri-commodities, including basmati rice, declined to 17.93 lakh tonnes in September this year compared to 27.94 lakh tonnes in the previous month.

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

Nifty Top volumes

• Adani Enterprises' wholly owned subsidiary -- AMG Media Networks has completed the acquisition of remaining 51% equity stake in Quintillion Business Media.
• HCL Technologies has launched its new Global Delivery Center in Iasi, Romania.
• USFDA has completed a GMP and PAI at Dr. Reddy's Laboratories' R&D centre in Bachupally, Hyderabad.
• UPL has incorporated new step-down subsidiary in the name of Advanta Seeds Zambia on December 5, 2023.