Indian equity benchmarks ended Friday's trade on higher note propelled by heavy buying in IT, TECK and Metal stocks amid a rally in global markets after lower-than-expected US inflation data. Key gauges remained strong during the day following a gap-up start as a strong rupee against the US dollar and unabated foreign capital inflows further bolstered sentiment. Traders took encouragement as State Bank of India has pencilled in lower current account deficit at 3 per cent for this fiscal as against the minimum consensus of 3.5 per cent, citing rising software exports, remittances and a likely $5-billion jump in forex reserves via swap deals. Sentiments remained up-beat with S&P Global Ratings stating that about half of the Indian companies that it rates are getting a boost in their core profitability from rupee depreciation. It said much of our rated India corporate portfolio has sizable US-dollar linked revenue and, therefore, is not exposed to rupee depreciation. This encompasses entities in the IT, metals, and chemicals sectors. About half of the firms we rate are getting an EBITDA boost from currency weakening. Continuous buying in last leg of trade helped markets to end near intraday high levels as optimism remained among traders as the Union Government released two instalments of tax devolution to State Governments amounting to Rs 1,16,665 crore, as against normal monthly devolution of Rs 58,333  crore, in line with the commitment of Government of India to strengthen the hands of States to accelerate their capital and developmental expenditure. Market participants overlooked reports stating that Moody's slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier as the global slowdown and rising domestic interest rates will dampen economic momentum. This is the second time that Moody's Investors Service has cut India's growth estimates. In September, it had cut projections for the current year to 7.7 per cent from 8.8 per cent estimated in May. Finally, the BSE Sensex rose 1181.34 points or 1.95% to 61,795.04 and the CNX Nifty was up by 321.50 points or 1.78% to 18,349.70.

The US markets ended higher on Friday as stocks continued to benefit from optimism about the Federal Reserve slowing the pace of interest rate hikes following tamer than expected inflation data. On the heels of the inflation data, private report is currently indicating an 80.6 percent chance the Fed will raise rates by 50 basis points next month compared to the recent 75 basis point rate hikes. Further, buying interest was also generated in reaction to reports that China is loosening some Covid restrictions, reducing quarantine times for inbound travelers. The loosening of curbs came a day after President Xi Jinping led his new Politburo Standing Committee in a meeting on Covid.  On the sectoral front, Steel stocks showed a substantial move to the upside on the news of China easing Covid restrictions, driving the NYSE Arca Steel Index up by 4.3 percent to a five-month closing high. A sharp increase by the price of crude oil also contributed to significant strength among energy stocks, as crude for December delivery surged $2.49 to $88.96 a barrel. On the economic data front, the University of Michigan released preliminary data showing US consumer sentiment has pulled back much more than expected in November after seeing modest improvements in recent months. The report showed the consumer sentiment index slumped to 54.7 in November after inching up 59.9 in October. Street had expected the index to edge down to 59.5. The much bigger than expected decrease by the headline index was partly due to a steep drop by the current economic conditions index, which tumbled to 57.8 in November from 65.6 in October. The report showed a more modest decrease by the index of consumer expectations, which fell to 52.7 in November from 56.2 in October.

Crude oil futures ended sharply higher on Friday on weaker dollar. The dollar extended its weakness due to the smaller than expected increase in US consumer prices raising hopes the Fed will be less aggressive with interest rate hikes in the coming months. The dollar index dropped to 106.28, losing about 1.79%. Further, China cut quarantine restrictions for inbound travelers and flights, boosting hopes for a revival in fuel demand. Authorities also removed a penalty for airlines for bringing in too many cases. Benchmark crude oil futures for December delivery rose $2.49 or about 2.9 percent at $88.96 a barrel on the New York Mercantile Exchange. Brent crude for January delivery surged $2.39 or about 2.55 percent to settle at $96.06 (Provisional) a barrel on London's Intercontinental Exchange.     

Indian rupee ended significantly higher against dollar on Friday, reversing Thursday's losses after softer-than-expected US inflation data raised hopes of less aggressive rate hikes by the US Federal Reserve. Local investors cheered after State Bank of India pencilled in lower current account deficit at 3 per cent for this fiscal as against the minimum consensus of 3.5 per cent, citing rising software exports, remittances and a likely $5-billion jump in forex reserves via swap deals. Traders paid no heed towards reports that Moody's slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier as the global slowdown and rising domestic interest rates will dampen economic momentum. On the global front, dollar fell on Friday, extending losses from the previous day, when it posted its largest one-day drop in seven years after U.S. inflation came in lower than expected, making it less likely the Federal Reserve will keep aggressively raising rates. Finally, the rupee ended at 80.78 (Provisional), stronger by 62 paise from its previous close of 81.40 on Thursday.

The FIIs as per Friday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 6533.77 crore against gross selling of Rs 6921.45 crore, while in the debt segment, the gross purchase was of Rs 56.80 crore against gross selling of Rs 257.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.93 crore against gross selling of Rs 27.52 crore.

The US markets ended higher on Friday extending a rally started the day before, after a soft inflation reading raised hopes the Fed would get less aggressive with US interest rate hikes. Asian markets are trading mixed on Monday after Fed Governor Christopher Waller pushed back on dovish rate bets saying that markets got way out in front over just one inflation print. Indian markets rallied on Friday as cooling U.S. inflation fueled hopes the Federal Reserve would soon start scaling down the size of its interest-rate hikes. Today, start of new week likely to be flat-to-positive ahead of October's retail and wholesale inflation data set to be released later in the day and amid mixed Asian cues. Sentiments will get a boost as Reserve Bank Governor Shaktikanta Das exuded confidence that India will continue to be the fastest growing major economy with a likely growth rate of 7% in 2022-23 on the back of strong macroeconomic fundamentals and financial sector stability. More optimism will come as Finance Minister Nirmala Sitharaman said India has emerged as one of the fastest-growing major economies in the world and is expected to be one of the top three economic powers globally over the next 10-15 years. Data showing growth in industrial production likely to aid domestic sentiments. The government data showed that India's industrial production expanded by 3.1 per cent in September, boosted by manufacturing, mining and power sectors. Some support will come as Commerce and Industry Minister Piyush Goyal exuded confidence that the India-US bilateral trade in goods and services will reach $500-600 billion by 2030 as their relation continues to strengthen. The trade between the two countries stands at about $175 billion at present. Traders will be taking some encouragement with report that foreign investors have infused close to Rs 19,000 crore in Indian equities so far this month, primarily due to moderating trend in the US inflation and softening of the dollar. Besides, the government released the figures for direct tax collection up to November 10, 2022. The gross collections came at Rs 10.54 trillion, up 30.69 per cent than the gross collections for the corresponding period of last year. However, some cautiousness may come as latest data released by the central bank showed that the Reserve Bank of India's (RBI's) foreign exchange reserves declined by $1.1 billion to $529.99 billion in the week ended November 4. There will be some reaction in aviation industry stocks as credit rating agency ICRA said the domestic airlines industry is projected to post a loss of Rs 15,000-17,000 crore in the current fiscal as their financial performance is likely to remain under pressure in the near term. Insurance industry stocks will be in focus as Irdai chief Debashish Panda said that regulatory reforms and technology innovation like sand boxes would be expedited to increase insurance penetration and density. Meanwhile, Keystone Realtors will hit the capital market today to raise funds through its IPO.

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

Nifty Top volumes

• Reliance Industries' telecom arm -- Jio has launched Jio True-5G's reach across more cities, namely Bengaluru & Hyderabad. 
• Mahindra & Mahindra has partnered with Mutares SE & Co. KGaA.  
• Kotak Mahindra Bank has launched Merchant One Account, a one-stop solution that caters to the banking and other business related needs of MSMEs, including small retailers.
• Bharti Airtel has launched its Airtel 5G Plus services in Panipat.