Indian equity benchmarks snapped a three-day winning streak and ended near day's low points on Thursday as the US Federal Reserve hinted at further rate hikes, leading to a sharp decline in Banking, Financial Services and Realty stocks. After making a cautious start, key gauges traded with marginal cut, as traders got anxious with a private report stating that the sowing of kharif crops such as paddy, pulses and oilseeds is likely to be delayed with the sluggish progress of monsoon following a late onset over the Kerala coast on June 8. However, markets soon erased losses and traded marginally higher in morning deals, as traders found solace with the provisional data available on the NSE showing that foreign institutional investors (FII) purchased shares worth a net Rs 1,714.72 crore on June 14. Traders also took a note of International Energy Agency (IEA) chief Fatih Birol's statement that India will soon overtake China as the largest driver of global oil demand even as it has an opportunity to become a world leader in green hydrogen production. But, buying proved short-lived as key benchmark indices succumbed to selling pressure in late morning deals, as traders turned wary with domestic rating agency Crisil stating that the growth in aggregate GST collection for states is likely to moderate to 12-14 per cent in FY24 from 20 per cent in FY23. Meanwhile, the Department for Promotion of Industry and Internal Trade (DPIIT) is all set to discuss issues related to further reducing compliance burden and promoting ease of doing business for the retail sector at a meeting of retail traders on June 16. Finally, the BSE Sensex fell 310.88 points or 0.49% to 62,917.63 and the CNX Nifty was down by 67.80 points or 0.36% to 18,688.10.

The US markets ended higher with gains of over one percent on Thursday on optimism about the outlook for interest rates following the release of a slew of U.S. economic data. While the Federal Reserve forecast further rate hikes on Wednesday, traders seem hopeful the central bank will not follow through. The optimism partly stemmed from a report from the Labor Department showing initial jobless claims held at their highest level since October 2021 in the week ended June 9th. The Labor Department said initial jobless claims came in at 262,000, unchanged from the previous week's revised level. Street had expected jobless claims to dip to 249,000 from the 261,000 originally reported for the previous week. A separate Labor Department report showing import prices in the U.S. fell by much more than expected in the month of May has also generated optimism about the outlook for inflation. The report said import prices slid by 0.6 percent in May, reflecting a sharp pullback in prices for fuel imports and a modest decrease in prices for non-fuel imports. Street had expected import prices to edge down by 0.1 percent. On the sectoral front, software stocks saw substantial strength on the day, with the Dow Jones U.S. Software Index surging by 2.7 percent to its best closing level in well over a year. Considerable strength also emerged among interest-rate sensitive housing stocks, as reflected by the 1.7 percent jump by the Philadelphia Housing Sector Index. The index also reached a more than one-year closing high. Transportation stocks also showed a significant move to the upside, driving the Dow Jones Transportation Average up by 1.6 percent to its best closing level in three months.

Crude oil futures ended sharply higher on Thursday buoyed by report suggesting a jump in demand from Chinese refineries. Data showed China's oil refinery throughput rose 15.4% in May from a year earlier, hitting its second highest total on record. Chinese demand for oil is expected to keep climbing at an assured rate during the second half of the year.  Further, the dollar's weakness also contributed the jumped in oil prices. The dollar index dropped to 102.12, losing about 0.8%. Benchmark crude oil futures for July delivery surged $2.35 or about 3.4 percent to settle at $70.62 a barrel on the New York Mercantile Exchange. Brent crude for August delivery rose $2.47 or 3.37 percent to settle at $75.67 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Thursday pulled down by a strong greenback overseas and a negative trend in domestic equities. Traders were worried as domestic rating agency Crisil said the growth in aggregate GST collection for states is likely to moderate to 12-14 per cent in FY24 from 20 per cent in FY23. On the global front, U.S. dollar strengthened on Thursday after the Federal Reserve left interest rates unchanged but signalled further rate hikes to come this year as attention turned to the European Central Bank policy announcement later in the day. The Fed's policy decision snapped a string of 10 consecutive rate hikes, but the projections, or dot plot, showed policymakers expect two more increases by the end of 2023. Finally, the rupee ended at 82.19 (Provisional), weaker by 14 paise from its previous close of 82.05 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 10498.65 crore against gross selling of Rs 8635.83 crore, while in the debt segment, the gross purchase was of Rs 189.60 crore against gross selling of Rs 210.48 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.48 crore against gross selling of Rs 11.46 crore.

The US markets ended sharply higher on Thursday as investors shrugged off Fed rate hike fears and a 25-bps rate hike by ECB. Asian markets are trading mixed on Friday as investors in the region look to the Bank of Japan's rate decision. Indian markets snapped three-day winning streak and ended lower on Thursday after the U.S. Federal Reserve signaled that two more rate increases are on the way. Today, start of the last trading day of week is likely to be positive as investors weigh firm Wall Street cues against data showing that India's trade deficit widened to a five-month high in May. Foreign fund inflows likely to aid domestic sentiments. Provisional data from the National Stock Exchange shows foreign institutional investors (FII) purchased shares worth Rs 3,085.51 crore on June 15. Some support will come as Moody's Investors Service said India's fast-growing gross domestic product (GDP) is going to be a key driver in bringing down the debt burden and debt affordability is going to be the key determinant of the country's credit profile and fiscal strength. Traders will be taking encouragement as India's Chief Economic Advisor V Anantha Nageswaran said India's current account deficit (CAD) is expected to narrow to below 2 per cent of gross domestic product (GDP) in 2023-24 and is less of a challenge to the economy now. Traders may take note of Commerce and industry minister Piyush Goyal's statement that India and Africa can double the bilateral trade to $200 billion by 2030. However, there may be some cautiousness as government data showed that India's exports in the month of May declined 10.3 per cent to $34.98 billion while imports fell 6.6 per cent to $57.1 billion. Exports have now contracted for the fourth month in a row, after contracting 12.7 per cent in April due to the global demand slowdown. India's merchandise trade deficit rose to its highest level since December 2022 to $22.12 billion in May. Coal industry stocks will be in focus as the Ministry of Coal said the overall coal stock position at mines, thermal power plants (TPPs) and in transit, reached a total of 110.58 million tonnes (MT) as compared to the stock of 76.67 MT last year. There will be some reaction in edible oil industry stocks as Ministry of Consumer Affairs, Food and Public Distribution announced a reduction in the import duty on refined soyabean oil and sunflower oil by 5 percentage points, bringing it down from 17.5 per cent to 12.5 per cent. Meanwhile, IKIO Lighting is likely to debut on the exchange. The Rs 607 crore IPO was subscribed almost 66 times, with high net individuals subscription at 63 times, and retail at 14 times.

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

Nifty Top volumes

• Tata Steel has signed a MoU with Germany's SMS group to collaborate on decarbonisation of steel making process.  
• Mahindra & Mahindra has launched its flagship SUV XUV700 in Australia. 
• Bharti Airtel has made 5G services available to customers across Kochi's water metro stations for the first time, adding to the already-live service in all other parts of the island city of Kochi. 
• HDFC Life Insurance Company's Assets under Management crossed Rs 2.5 lakh crore on June 7, 2023.