Indian equity benchmarks erased most of their initial gains but managed to end marginally higher on Thursday. Buying in market heavyweight stocks TCS, Infosys and Bajaj Finserv helped indices settle in the positive territory. Initially, upbeat global cues triggered a gap-up start in markets. Traders also took encouragement with data showing that India's industrial production growth measured in terms of the Index of Industrial Production (IIP) rose to 5.2 per cent in May, mainly due to good performance by the manufacturing and mining sectors. Traders also took note of Union Minister of State for Petroleum and Natural Gas Rameswar Teli's statement that India is the fastest growing among the major economies of the world and the petroleum and petrochemical sector is playing a pivotal role in this. Markets held their strong gains in late morning deals, as sentiments remained optimistic with data showing that investment in the domestic capital markets through participatory notes rose to Rs 1.04 lakh crore in May-end, the highest level in over five years, fuelled by the resilience of the Indian economy. This includes the value of P-note investments in Indian equity, debt, and hybrid securities. However, key gauges trimmed most of their gains in late hour of trade as hotter-than-expected domestic inflation kept investors cautious. India's retail inflation reversed its four-month downward trend in June on surging food prices, though it remained within the Reserve Bank of India's (RBI's) upper tolerance limit. The Consumer Price Index (CPI)-based inflation rate rose to a three-month high of 4.81 per cent year-on-year (YoY) in June, as against 4.31 per cent in the previous month, because of a sharp increase in the prices of food & beverages and services. Finally, the BSE Sensex rose 164.99 points or 0.25% to 65,558.89 and the CNX Nifty was up by 29.45 points or 0.15% to 19,413.75.

The US markets ended higher on Thursday following the release of a Labor Department report showing producer prices in the U.S. inched up by slightly less than expected in the month of June.  The Labor Department said its producer price index for final demand crept up by 0.1 percent in June after falling by a revised 0.4 percent in May. Street had expected producer prices to rise by 0.2 percent compared to the 0.3 percent dip originally reported for the previous month. The report also said the annual rate of producer price growth slowed to just 0.1 percent in June from a revised 0.9 percent in May. The pace of growth was expected to slow to 0.4 percent from the 1.1 percent originally reported for the previous month. Meanwhile, a separate Labor Department report unexpectedly showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended July 8th. The Labor Department said initial jobless claims slipped to 237,000, a decrease of 12,000 from the previous week's revised level of 249,000. The dip surprised participants, who had expected jobless claims to inch up to 250,000 from the 248,000 originally reported for the previous week. On the sectoral front, computer hardware stocks saw substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 2.4 percent to its best closing level in over a year. Semiconductor and software stocks also showed significant moves to the upside, contributing to the surge by the tech-heavy Nasdaq.

Crude oil futures ended sharply higher on Thursday as an OPEC report maintained an upbeat world oil demand outlook despite economic weakness. It raised its growth forecast for 2023 and predicted only a slight slowdown in 2024, with China and India expected to keep driving the expansion in fuel use. Meanwhile, a report by the International Energy Agency (IEA) predicted oil demand would hit a record high this year, though broader economic headwinds and interest rate hikes meant the increase would be slightly less than previously anticipated.  The Energy Information Agency's forecast that expects the Brent spot price to average $79.34 a barrel this year, and $83.51 a barrel in 2024. Benchmark crude oil futures for August delivery rose $1.14 or about 1.5 percent to settle at $76.89 a barrel on the New York Mercantile Exchange. Brent crude for September delivery surged $1.25 or 1.6 percent to settle at $81.36 a barrel on London's Intercontinental Exchange.

Indian rupee appreciated against the dollar on Thursday following a positive trend in domestic equities and a weak greenback against major crosses overseas. Investors got support as India's industrial production growth measured in terms of the Index of Industrial Production (IIP) rose to 5.2 per cent in May, mainly due to good performance by the manufacturing and mining sectors. Traders shrugged off report that retail inflation based on Consumer Price Index (CPI) rose to a three-month high of 4.81 per cent in June 2023, mainly on account of hardening prices of cereals and pulses, though it remained within the comfort zone of the Reserve Bank. On the global front, the pound rose for the sixth session running to a new 15-month high on Thursday after data showed the British economy shrank by less than expected in May. Finally, the rupee ended at 82.08 (Provisional), stronger by 10 paise from its previous close of 82.18 on Wednesday.

The FIIs as per Thursday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 18839.94 crore against gross selling of Rs 19173.54 crore, while in the debt segment, the gross purchase was of Rs 1105.52 crore against gross selling of Rs 1504.35 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.85 crore against gross selling of Rs 11.29 crore.

The US markets ended higher on Thursday as data showed the annual increase in U.S. producer inflation was the smallest in nearly three years. The data provided more evidence that inflation pressures were subsiding. Asian markets are trading higher in early deals on Friday following positive cues from global markets overnight. Indian equity markets ended marginally higher on Thursday after hitting record highs. Today, markets are likely to make optimistic start on firm global cues. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth a net Rs 2,237.93 crore on July 13. Some support may also come as private report said that the India growth story remains intact and recession in certain parts of the world is unlikely to seep into the country; on the contrary this would be a golden decade for India. Traders may get some encouragement as economic Affairs Secretary Ajay Seth said that the role of India's G20 presidency is to lead the effort to develop global consensus, and there continues to be a strong desire that all countries continue to work together to find that consensus. Meanwhile, Chief Economic Adviser V Anantha Nageswaran said turning jobseekers into job-givers is an important goal of the government and many steps have been taken in recent years to achieve this objective. He said it relieves pressure on the job market. In terms of financing, the credit guarantee scheme that was launched during Covid, and continued until this year, has done a wonderful job in ensuring that the MSME space remains vibrant. Moreover, the commerce and industry ministry is likely to seek Cabinet approval to sign and ratify the Supply Chains Agreement under the Indo-Pacific Economic Framework (IPEF), the negotiations for which were concluded in May. Besides, stock-specific action amid June quarter results will continue to dominate the Street.

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

Nifty Top volumes

• Deep Industries has received LoA from ONGC for Charter Hiring of 1 numbers of 90 MT Mobile Drilling Rigs with Integrated Mud Services & METP with Manpower for a period of 3 years for CBM Asset, Bokaro.
•  UltraTech Cement has commissioned 1.3 mtpa brownfield cement capacity at Sonar Bangla, West Bengal, taking the Unit's capacity to 3.3 mtpa.
•  Dr. Reddy's Laboratories' Biologics License Application (BLA) for its proposed biosimilar rituximab candidate DRL_RI has been accepted for a substantive review by the U.S.
•  HCL Technologies has signed a definitive agreement to acquire a 100 per cent equity stake in ASAP Group, an automotive engineering services provider.