In a highly volatile session, Indian equity benchmarks ended marginally lower on Friday due to selling pressure in Metal, Utilities and Power stocks amid a bearish trend in global equity markets. Markets made a negative start and remained in red for whole day as investors remained on sidelines ahead of the index of industrial production (IIP) or industrial growth data to be out later in the day and India's retail inflation data for January, due on Monday. Traders also remained cautious with exchange data showing that Foreign Portfolio Investors were net sellers, offloading shares worth Rs 144.73 crore. Some concern came amid a private report predicting that higher food prices likely nudged up India's annual retail inflation last month from a 12-month low in December, but it stayed within the Reserve Bank of India's targeted range for a third consecutive month. Sentiments remained down-beat in afternoon deals amid another report stating that a year of war in Ukraine has already made a dent in world prosperity. But its deeper impact will be felt in how the conflict plays into shifts that were already reshaping the global economy before Russia's tanks rolled in. However, markets managed to trim some losses in late afternoon deals, as traders found some support with a domestic ratings agency -- Icra Ratings stating that the RBI's rate hike will not impact collection efficiencies for non-bank lenders. It said this is so primarily because of the collaterals given by borrowers and the priority they accord to repayments. Finally, the BSE Sensex fell 123.52 points or 0.20% to 60,682.70 and the CNX Nifty was down by 36.95 points or 0.21% to 17,856.50.

The US markets ended mostly higher on Friday. The choppy trading on markets partly reflected lingering uncertainty about the outlook for interest rates ahead of next week's closely watched inflation data. Traders were likely to keep a close eye on the data for clues about whether Federal Reserve will need to raise rates higher than currently anticipated in order to bring down prices. The mixed performance also came as traders react to mixed February consumer sentiment data released by the University of Michigan. While consumer sentiment saw a continued improvement in February, the report also showed a rebound in near-term inflation expectations. The report showed the consumer sentiment index rose to 66.4 in February from 64.9 in January. Street had expected the index to inch up to 65.0. The consumer sentiment index increased for the third straight month, reaching its highest level since hitting 67.2 in January 2022. Meanwhile, one-year inflation expectations climbed to 4.2 percent in February from 3.9 percent in January, with expectations rebounding after falling for three straight months. The lackluster performance on markets also reflected a mixed reaction to the latest batch of corporate earnings news. Shares of Lyft (LYFT) plummeted after the ride-sharing company reported an unexpected fourth quarter loss and provided disappointing revenue guidance for the current quarter. Travel company Expedia (EXPE) also moved sharply lower after reporting fourth quarter results that missed analyst estimates on both the top and bottom lines.

Crude oil futures ended higher on Friday on continued optimism about higher fuel demand from China, and on Russia's move to reduce oil output next month. Russia has announced that it would cut oil output by 500,000 barrels per day in March. Ahead of announcement of the decision, Russia's Deputy Prime Minister Alexander Novak warned that there was risk of lower oil production this year. Novak said the risk was due to the EU import bans and the price caps on Russian crude and petroleum products. Benchmark crude oil futures for March delivery rose $1.66 or 2.1 percent at $79.72 a barrel on the New York Mercantile Exchange. Brent crude for April delivery surged $1.89 or 2.2 percent at $86.39 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Friday, tracking a muted trend in domestic equities and firm crude oil prices. Investors fretted about the potential for further Federal Reserve tightening and the effect on the economy. Besides, private report predicting that higher food prices likely nudged up India's annual retail inflation last month from a 12-month low in December, but it stayed within the Reserve Bank of India's targeted range for a third consecutive month. On the global front, the pound eased on Friday after data showed the UK economy ground to a halt in the final three months of 2022, avoiding a technical recession, but logging zero growth. Finally, the rupee ended at 82.55 (Provisional), weaker by 4 paise from its previous close of 82.51 on Thursday.

The FIIs as per Friday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 7031.72 crore against gross selling of Rs 6999.04 crore, while in the debt segment, the gross purchase was of Rs 347.94 crore against gross selling of Rs 1608.01 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.96 crore against gross selling of Rs 20.27 crore.

The US markets ended mostly in green on Friday amid lingering uncertainty about the outlook for interest rates ahead of next week's closely watched inflation data. Asian markets are trading mostly lower on Monday as investors hunkered down for US inflation and retail sales data that could jolt the outlook for interest rates globally. Domestic indices ended lower on Friday due to selling pressure in metal and energy stocks amid a bearish trend in global equity markets. Today, Indian markets are likely to open lower on first trading day of the week amid largely negative global cues. Traders will be concerned as growth in factory output decelerated to a two-month low of 4.3 per cent in December as manufacturing dragged the overall growth in the Index of Industrial Production (IIP) even as mining and electricity production grew at a robust pace. Now, investors will be looking ahead to the inflation data to be later in the day. Some cautiousness may come as RBI data showed India's foreign exchange reserves dropped by $1.494 billion to reach $575.267 billion as of February 3, snapping a three-week rising trend. Besides, foreign investors continue to desert Indian stock markets as they pulled out over Rs 9,600 crore this month so far on costlier valuation of domestic equities compared to other emerging markets. However, some support may come later in the day as the finance ministry said gross direct tax collections grew 24 per cent to Rs 15.67 trillion so far this fiscal. After adjusting for refunds, the net direct tax collection stood at Rs 12.98 trillion, a growth of 18.40 per cent. Traders may take note of report that Reserve Bank of India (RBI) Governor Shaktikanta Das admitted that the central bank's inflation forecast for the next financial year is conservative and low crude oil prices could work in India's favour. Banking stocks will be in focus as latest data by the Reserve Bank of India (RBI) showed bank credit grew at 16.3 per cent year-on-year (YoY) in the fortnight ended January 27 to Rs 133.41 trillion, moderating marginally from the growth witnessed till last fortnight (16.5 per cent). Meanwhile, SAIL, Nykaa, Power Finance Corporation, Gujarat Gas, Castrol India, Campus Activewear, GR Infraprojects, Borosil Renewables, Zee Entertainment, among others will report the October-December quarter (Q3FY23) results.

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

Nifty Top volumes

• Tata Motors has delivered 218 Winger veterinary vans to the Government of West Bengal.  
• State Bank of India has opened its third specialised branch for startups at Gurugram to provide all banking services required by them under one roof.
• ITC's wholly owned subsidiary -- ITC Infotech India has incorporated wholly owned subsidiary in France under the name of ITC Infotech France SAS on February 8, 2023.
• M&M has signed MoU with the Government of Telangana for its proposed expansion plans at its existing manufacturing facility at Zaheerabad Plant in Medak District.