Indian equity benchmarks ended lower for the second consecutive session on Friday as investors avoided taking any long position ahead of India's Index of Industrial Production (IIP) data to be out later in the day. After a cautious start, the benchmark indices extended the losses as the day progressed, as traders got anxious with private report stating that India's headline retail inflation is expected to have crashed past the upper bound of the Reserve Bank of India's (RBI) 2-6 percent tolerance band in July on its way to a nine-month high due to a surge in vegetable prices. Sentiments remained dampened as the Reserve Bank of India (RBI) in its July 2023 round of its bi-monthly consumer confidence survey (CCS) stated that after persistent recovery for almost two years, consumer confidence for current period, as reflected in the current situation index (CSI), stood a shade lower than that witnessed in the previous survey round; improvement in respondents' sentiment on income and spending was offset by somewhat higher pessimism on general economic and employment situation. Markets recovered a bit in the afternoon session but failed to build on it and finished the session near the day's lows. Traders took a note of report stating that tagging a genuine exporter as risky will hurt India's exports and an inter-ministerial committee comprising representatives from finance and commerce ministries is required to consider all aspects before branding them under this category. Traders overlooked a finance minister Nirmala Sitharaman's statement that while the global economy is struggling, India is uniquely positioned to be optimistic and positive about its future growth. The minister highlighted that India is the fastest-growing economy despite disruptions due to the pandemic. Meanwhile, Reserve Bank Governor Shaktikanta Das has said the move to impose a 10 per cent incremental cash reserve ratio for a limited period will help suck out Rs 1 lakh crore of excess liquidity from the system. The move, announced along with the bi-monthly policy review, was the best option under the current circumstances and there is enough liquidity in the system for the banks to continue their lending operations. Finally, the BSE Sensex fell 365.53 points or 0.56% to 65,322.65 and the CNX Nifty was down by 114.80 points or 0.59% to 19,428.30.

The US markets ended mostly lower on Friday following the release of a Labor Department report showing producer prices climbed by slightly more than expected in the month of July. The Labor Department said its producer price index for final demand rose by 0.3 percent in July following a revised unchanged reading in June. Street had expected producer prices to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month. The report also showed the annual rate of producer price growth reaccelerated to 0.8 percent in July after slowing to just 0.2 percent in June. The rate of growth was expected to accelerate to 0.7 percent. On the sectoral front, semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 2.3 percent to its lowest closing level in well over a month. Considerable weakness was also visible among airline stocks, with the NYSE Arca Airline Index tumbling by 2.0 percent to a two-month closing low. Computer hardware stocks also saw notable weakness, resulting in a 1.3 percent drop by the NYSE Arca Computer Hardware Index. However, oil stocks moved higher amid a rebound by the price of crude oil, driving the NYSE Arca Oil Index up by 1.4 percent. Gold stocks also turned in a strong performance despite a modest decrease by the price of the precious metal, with the NYSE Arca Gold Bugs Index climbing by 1.1 percent.

Crude oil futures ended higher on Friday as investors focused on tightening supplies as a result of previously announced cuts by Saudi Arabia and Russia. Oil prices got support after a report from the International Energy Agency (IEA) forecast strong demand for oil and tightening supplies in the market. In a report, the IEA said global oil demand hit a record 103 million barrels per day in June and added that demand could scale another peak this month. The IEA also said output cuts from Russia and Saudi Arabia could result in a sharp decline in inventories over the rest of this year and lift oil prices even higher. Benchmark crude oil futures for September delivery rose $0.37 or about 0.50 percent to settle at $83.19 a barrel on the New York Mercantile Exchange. Brent crude for October delivery gained $0.41 or 0.5 percent to settle at $86.81 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Friday amid weak sentiment in the equity markets and a strong dollar against major rivals overseas. Investors were worried with private report stating that India's headline retail inflation is expected to have crashed past the upper bound of the Reserve Bank of India's (RBI) 2-6 percent tolerance band in July on its way to a nine-month high due to a surge in vegetable prices. Traders took a note of report that Reserve Bank of India (RBI) has raised the cash reserve ratio in an incremental 10 per cent in proportion to banks' liquidity. On the global front, the dollar headed for a fourth weekly gain on Friday even after data showed U.S. inflation did not pick up as strongly as expected in July, reinforcing the existing view among investors that the Federal Reserve is unlikely to raise rates much more. Finally, the rupee ended at 82.82 (Provisional), weaker by 16 paise from its previous close of 82.66 on Thursday.

The FIIs as per Friday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 11571.97 crore against gross selling of Rs 9523.33 crore, while in the debt segment, the gross purchase was of Rs 403.00 crore with gross sales of Rs 143.90 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.47 crore against gross selling of Rs 32.79 crore.

The US markets ended mostly lower on Friday after data showed producer prices rose more than expected in July while consumer confidence dropped for the first time in 14 months, raising much uncertainty about the outlook for inflation and interest rates. Asian markets are trading in red on Monday as investors look toward key data from Japan and China this week. Indian markets ended lower on Friday as initial optimism over tame U.S. CPI data fizzled out, following hawkish comments from a Federal Reserve official. Today, start of holiday shortened week is likely to be pessimistic tracking weakness in global peers. Investors likely to remain on sidelines ahead of the key inflation data (Retail inflation and Wholesale inflation) later today and a trading holiday on Tuesday on account of India's Independence Day. Slowdown in India's industrial growth likely to weigh on sentiment. The data released by the National Statistical Office (NSO) showed growth in the index of industrial production (IIP) cooled to a three-month low of 3.7 per cent in June from 5.2 per cent in May, on the back of a high base effect and slowdown in manufacturing output. Foreign fund outflows likely to dent sentiments. Provisional data from the National Stock Exchange (NSE) showed foreign institutional investors (FII) sold shares worth Rs 3,073.28 crore on August 11. Traders will be concerned as the National Institute of Public Finance and Policy (NIPFP) in a mid-year macroeconomic review said that India's economic growth is expected to slow down to 6 per cent in this financial year (FY24) from 7.2 per cent in FY23 due to headwinds in the global economy. Also, latest data by the Reserve Bank of India showed India's foreign exchange reserve declined by $2.4 billion to $601 billion in the week ended July 4. Traders may take note of report that the Ministry of Heavy Industries (MHI) is set to implement two production-linked incentive (PLI) schemes, namely the PLI scheme for automobile and auto components (PLI Auto), and the PLI scheme for advanced chemistry cell (ACC) (PLI ACC). Besides, sowing of kharif crops is over in almost 90 per cent of the normal area during the week ended August 11, with acreage of rice being higher by almost 4.92 per cent as compared to the same period last year. Meanwhile, Q1FY24 results of Aster DM Healthcare, Easy Trip Planners, Indiabulls Housing Finance, Vodafone Idea, ITC, Senco Gold, and SpiceJet will be on investors' radar.

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

Nifty Top volumes

• HCL Technologies has entered into a strategic global partnership with Verizon Business for managed network services. 
• Mahindra & Mahindra has broadened the appeal of its acclaimed XUV300 SUV, offering greater accessibility for enthusiasts. 
• ITC is betting big on the FMCG business for growth.
• Hero MotoCorp has reported 19.63% rise in its consolidated net profit at Rs 700.54 crore for Q1FY24 as compared to Rs 585.58 crore for the same quarter in the previous year.