Indian equity benchmarks ended Friday's volatile session on a flat note mainly dragged by losses in Telecom, Metal and FMCG stocks. Markets made positive start and traded with marginal gains, as traders took some support with Moody's Investors Service in its latest report stated that India's economic recovery reduces the risk of a sharp deterioration in public sector banks' (PSBs) asset quality. But, it said the capital would remain insufficient to support credit growth and absorb unexpected shocks. Buying further crept in as leading trade bodies are expecting that the outbound shipments will rise in the coming months as the uncertainty in global markets began to subside. Domestic sentiments remained positive as the government approved applications from several medical devices manufacturers under the Production Linked Incentive (PLI) scheme for the promotion of domestic manufacturing. However, key gauges erased all the gains to turn negative in late afternoon session, tracking weak cues from global markets. Traders also remained on sidelines ahead of the release of Index of Industrial Production (IIP) data for December and Consumer Price Index (CPI) data for January later in the day. Traders were cautious even after Union Minister of State for Finance Anurag Thakur has said that the budget shows hope to build a new India and will lead the nation on the path of becoming an economic and manufacturing powerhouse. Traders took note of Commerce and Industry Minister Piyush Goyal's statement that the government has constituted a committee comprising members from public and private sectors to look into issues like promoting localisation and boosting manufacturing. Finally, the BSE Sensex rose 12.78 points or 0.02% to 51,544.30, while the CNX Nifty was down by 10.00 points or 0.07% to 15,163.30.

The US markets closed in green on Friday amid optimism about more fiscal stimulus and an easing of the coronavirus crisis. Also, investors looked toward signs that Washington is moving ahead with a spending bill. Markets showed a lackluster performance for much of the trading day but moved to the upside late in the session. The late buying helped markets to scaled new record closing highs. Profit taking contributed to modest weakness early in the trading session, although selling pressure remained subdued. Meanwhile, traders largely shrugged off a preliminary report from the University of Michigan showing an unexpected deterioration in US consumer sentiment in the month of February. The University of Michigan said its consumer sentiment index fell to 76.2 in February after edging down to 79.0 in January. The drop came as a surprise to market participants, who had expected the index to inch up to 80.8. With the unexpected decrease, the consumer sentiment index slid to its lowest level since hitting 74.1 in August of 2020. Traders have recently looked at weak economic data as a positive for the markets amid the assumption that it will put pressure on lawmakers to provide more stimulus.

Crude oil futures settled higher on Friday, rebounding from early losses, as tensions in the Middle East raised the possibility of disruptions in crude supplies. Early cautiousness was due to a report from OPEC that lowered the demand forecast and the International Energy Agency's remarks indicating that the re-balancing of the global oil markets remains fragile. OPEC said in its February Oil Market Report that oil demand will likely rise by 5.8 million barrels per day this year, down by around 100,000 bpd from last month's projection due to extended lockdowns and the re-introduction of partial lockdowns in a number of countries. Meanwhile, a report from Baker Hughes said the number of active US rigs drilling for oil increased by 7 to 306 this week. With this, the rig count has risen for 11 straight weeks. The total rig count was up by 5 at 397. Crude oil futures for March gained $1.23 or 2.1 percent to settle at $59.47 barrel on the New York Mercantile Exchange. April Brent crude rose $1.29 or 2.1 percent to settle at $62.43 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly higher against dollar on Friday, on persistent selling of the American currency by exporters. Sentiments were upbeat with Union Minister of State for Finance Anurag Thakur's statement that the Union budget 2021-22 shows hope to build a new India and will lead the nation on the path of becoming an economic and manufacturing powerhouse. Meanwhile, exporters urged the government to provide support measures in the next foreign trade policy (FTP), being formulated by the commerce ministry, to boost the country's outbound shipments. On the global front, pound slipped below $1.38 against the dollar but was steady against the euro on Friday, after data showed Britain's economy suffered a record slump in 2020, but grew in the final quarter. Finally, the rupee ended at 72.75, 12 paise stronger from its previous close of 72.87 on Thursday.

The FIIs as per Friday's data were net buyer in equity segment while net seller in debt segment. In equity segment, the gross buying was of Rs 5689.85 crore against gross selling of Rs 4666.22 crore, while in the debt segment, the gross purchase was of Rs 202.00 crore with gross sales of Rs 338.95 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.05 crore against gross selling of Rs 19.84 crore.

The US markets settled higher on Friday amid anticipation of new fiscal aid from Washington to help the US economy recover. Asian markets are trading in green on Monday as successful coronavirus vaccine rollouts globally raise hopes of a rapid economic recovery amid new fiscal aid from Washington. Indian markets ended flat on Friday after rising in early deals as FMCG, energy, pharma and metal stocks declined. Today, the markets are likely to get gap-up opening of new week on firm global cues. Positive macro-economic data may aid the sentiments in markets. The Index of Industrial Production (IIP) grew by 1 per cent in December on a year-on-year (Y-o-Y) basis compared with a 2 per cent decline in the previous month, the data released by the National Statistical Office showed. On the other hand, the consumer price index (CPI)-based inflation rate fell for the third consecutive month to 4.06 per cent in January as food inflation, pulled down by deflation in vegetables, drastically declined. Traders will be getting encouragement as PHDCCI said expectations that the country's GDP would record growth in the third and fourth quarters of 2020-21 are getting stronger on account of various reforms undertaken by the government in the last ten months. Some support will also come as Chief Economic AdviserK V Subramanian said the reform measures announced in the Budget 2021-22 will play a big role in India becoming a $5 trillion economy and beyond. Besides, continuing their buying trend, foreign portfolio investors (FPIs) have pumped in a net Rs 22,038 crore into the Indian markets in February so far amid positive sentiments around the Union Budget. Traders may take note of Finance Minister Nirmala Sitharaman's statement that the government, undeterred by the COVID-19 pandemic, has been pursuing reforms for achieving sustained long-term growth in a bid to make India one of the top economies of the world in the coming decades. There will be some buzz in insurance industry stocks with report that the Finance Ministry will infuse Rs 3,000 crore capital into state-owned general insurance companies during the current quarter in a bid to improve their financial health. Metal stocks will be in focus as doing away with restrictive conditions for use of steel in highways construction, the government announced that all kinds of steel will be allowed for highways provided these meet the quality parameters. Meanwhile, China, Hong Kong, Taiwan stock markets were closed for Lunar New Year holidays.

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

Nifty Top volumes

• TCS has strengthened its partnership with Snowflake, with the launch of a curated version of its TCS DAEzMo suite of solutions. 
• Infosys has agreed with ideaForge Technology to invest an additional $1.0 million taking the cumulative investment to $2.5 million as of date, subject to necessary closing conditions.
• Coal India has received approval for incorporation of two wholly owned subsidiaries of the company, subject to approval of Government of India. 
• L&T's construction arm -- L&T construction's Transportation Infrastructure business has secured an order to extend the mainline corridor of the Mauritius Metro by 3.4 km from Metro Express, Mauritius.