Indian equity benchmarks ended on positive note after a highly volatile session on Friday led by gains in index majors NTPC, Tata Steel and Power Grid Corporation. Key indices opened marginally in red, as traders remained on sidelines ahead of IIP (Index of Industrial Production) and Consumer Price Index (CPI) inflation numbers to be released after market hours on Friday. However, key gauges soon erased losses to trade in green, as traders found some solace with a private report that India will be the fastest growing major economy this year and the next despite headwinds from rising inflation, widening trade deficit and a declining rupee. It added that the 7 per cent decline in rupee value against the US dollar this year was not worrisome, and the government and RBI are confident of managing the situation.  Some support also came as S&P Global Ratings said the Indian economy can handle some erosion of its foreign exchange reserves as its external position is very strong. Benchmarks managed to keep their head above water in afternoon deals, as largely positive trend in global equities and foreign capital inflows also supported the domestic equity markets. According to exchange data, foreign institutional investors (FIIs) were net buyers in the Indian capital market as they purchased shares worth Rs 2,298.08 crore on Thursday. Some optimism also came as State Bank of India in a report said India's inflation trajectory going forward is expected to be benign with headline retail inflation potentially printing at less than 5 per cent in March 2023. It added that CPI (consumer price index) numbers for March 23 could be even lower than 5 per cent, if July CPI numbers are closer to 6.5-6.6 per cent, a likely possibility. Traders took note of commerce and industry ministry's statement that India and the UK aim to conclude the free trade agreement by the end of October this year. Finally, the BSE Sensex rose 130.18 points or 0.22% to 59,462.78 and the CNX Nifty was up by 39.15 points or 0.22% to 17,698.15.

The US markets ended higher on Monday despite weak industrial output, retail sales and fixed-asset investment data out of China. Data showing weak business activity in New York hurt as well. New York manufacturing activity has unexpectedly seen a substantial contraction in the month of August, according to a report released by the Federal Reserve Bank of New York. The New York Fed said its general business conditions index plummeted to a negative 31.3 in August from a positive 11.1 in July, with a negative reading indicating a contraction in regional manufacturing activity. Street had expected the index to show a much more modest decrease to a positive 8.5. The unexpected contraction in regional manufacturing activity came as the new orders plunged to a negative 29.6 in August from a positive 6.2 in July, while the shipments index dove to a negative 24.1 from a positive 25.3. The report showed the number of employees index also fell to 7.4 in August from 18.0 in July, although a positive reading still indicates job growth. Meanwhile, a report released by the National Association of Home Builders unexpectedly showed a continued deterioration in US homebuilder confidence in the month of August. The report showed the NAHB/Wells Fargo Housing Market Index dropped to 49 in August from 55 in July. Street had expected the index to come in unchanged. With the unexpected decrease, the housing market index fell below the key break-even measure of 50 for the first time since May 2020. However, stock specific development, Snap rallied more than 5 percent, buoyed by an announcement from the company that its subscription services Snapchat+ had surpassed 1 million paid users.  

Extending their previous session's losses, crude oil futures ended deeply in red on Monday on account of worries about energy demand after data showed a much slower than expected pace of growth of the Chinese economy in July. Data from the National Bureau of Statistics showed industrial production in China was up 3.8% percent on year in July, the National Bureau of Statistics said - shy of expectations for an increase of 4.6% and down from 3.9% in June. Besides, the lowering of oil demand forecast for 2022 by the Organization of the Petroleum Exporting Countries (OPEC) last week also weighed on prices. Benchmark crude oil futures for September delivery fell $2.68 or about 2.9 percent to settle at $89.41 a barrel on the New York Mercantile Exchange. Brent crude for October delivery lost $3.05 or 3.1 percent to settle at $95.10 a barrel on London's Intercontinental Exchange.

Indian rupee turned lower on Friday, due to sustained dollar demand from banks and importers amid higher dollar overseas. Traders took note of report that India and the UK will continue to work intensively to conclude the majority of talks on a comprehensive and balanced Free Trade Agreement (FTA) by end of October 2022. In a joint statement on the ongoing FTA negotiations, the Department for International Trade (DIT) said the fifth round involved a detailed draft treaty text discussion over 85 separate sessions and 15 policy areas. The latest round concluded, with the next due to be held in the UK later this month. Also, traders remained on sidelines ahead of the industrial growth data for June and retail inflation figures for July to be out later in the day. On the global front, dollar rose on Friday but was still set for a weekly decline as traders looked for signs of US inflation peaking. Finally, the rupee ended at 79.74 (Provisional), weaker by 12 paisa from its previous close of 79.62 on Thursday.

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 9023.30 crore against gross selling of Rs 6774.45 crore, while in the debt segment, the gross purchase was of Rs 816.89 crore against gross selling of Rs 659.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.28 crore against gross selling of Rs 8.54 crore.

The US markets ended higher on Monday amid investors look ahead to several updates from retailers this week. Asian markets are mostly trading higher on Tuesday following the broadly positive cues from global markets overnight.  Indian equity benchmarks ended higher on Friday as traders got support amid reports that start-ups have been the buzzword in India for the last several years. Today, markets are likely to make positive start on account of falling crude oil prices amid strong cues from global markets. Traders may get encouragement on report that during the April-July period, the central government achieved more than a third of the direct tax collection for this financial year as personal tax collection exceeded corporation tax mop-up amid tightened enforcement and compliance measures. Overall direct tax collections, net of refunds, including corporation and personal income tax, grew by 40 per cent in the first four months of FY23 to Rs 5 trillion, which is nearly 35 per cent of the target of Rs 14.2 trillion for the whole fiscal year.  Meanwhile, a private report stated that the finance ministry is proposing to soon review the exemption-free new tax regime with a view to making it more attractive for individual income taxpayers. The government aims to establish a system where there are no exemptions and the complex old tax regime with exemptions and deductions is terminated. Traders may take note on report that former RBI Governor D Subbarao said India may become a USD five trillion economy by 2028-29 only if the GDP grows at nine per cent per annum consistently for the next five years. Aviation industry stocks will be action as Civil Aviation Minister Jyotiraditya Scindia said that the dip in the air turbine fuel (ATF) price and the continuation of this trend will benefit the aviation sector. He said the fall in the ATF rates will have a good impact on airlines under pressure. There will be some buzz in FMCG stocks on report that inflationary pressure on some raw material inputs for the FMCG industry is abating but the manufacturers expect its impact on price and margins to continue in the current quarter.

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

Nifty Top volumes

• Tata Motors has joined hand with State Bank of India to offer Electronic Dealer Finance solution to its authorized passenger EV dealers.
• Maruti Suzuki India has launched the S-CNG variant of its iconic sporty hatchback Swift.
• Titan Company has launched Titan Smart Labs in Hyderabad, a dedicated engineering centre to create innovative and diversified products to meet evolving consumer demands.
• Hero MotoCorp and Harley-Davidson have commenced retail sales of the highly anticipated Nightster motorcycle in India.