Indian equity benchmarks trimmed most of their initial gains and ended on a flat note amid late volatility owing to the weekly Nifty F&O expiry on Thursday. Markets made optimistic start tracking positive cues from Wall Street after strong US retail sales data signalled strength in the world's biggest economy. Increased buying by foreign institutional investors also supported the markets. Foreign institutional investors extended their buying streak in Indian equities for the fourth consecutive session on Wednesday. Over the past four sessions, FIIs have bought a net Rs 4,517 crore worth of equities. Sentiments remained positive with Finance minister Nirmala Sitharaman's statement that the effort of the government over the years has been to increase public expenditure with a view to promote growth. She said that the government in the 2023-24 budget increased the capital expenditure by 33 per cent to Rs 10 lakh crore. However, markets wiped out most of their gains and touched a low towards the fag end amid volatility faced during the last minutes of trading hours. Traders were anxious with the commerce ministry in its latest data showing that contracting for the second month in a row, India's Merchandise exports dipped by 6.58 per cent to $32.91 billion in January 2023 as against $ 35.23 billion in the same month last year due to slowdown in global demand, even as the trade deficit touched a 12-month low of $17.75 billion during the month. Finally, the BSE Sensex rose 44.42 points or 0.07% to 61,319.51 and the CNX Nifty was up by 20.00 points or 0.11% to 18,035.85.

The US markets ended lower on Thursday following the release of a Labor Department report showing a bigger than expected increase in producer prices. The Labor Department said its producer price index for final demand climbed by 0.7 percent in January after edging down by a revised 0.2 percent in December. Street had expected producer prices to increase by 0.4 percent compared to the 0.5 percent drop originally reported for the previous month. While the report also showed the annual rate of producer price growth slowed to 6.0 percent in January from 6.5 percent in December, the year-over-year growth was expected to slow to 5.4 percent. Following the consumer price inflation and retail sales data released earlier this week, the report added to worries about the outlook for interest rates. Traders have recently expressed concerns the Federal Reserve will raise rates higher than currently anticipated in an effort to combat inflation. On the sectoral front, software stocks moved sharply lower over the course of the session, dragging the Dow Jones U.S. Software Index down by 2.7 percent. Substantial weakness was also visible among semiconductor stocks, as reflected by the 2.5 percent slump by the Philadelphia Semiconductor Index. Airline stocks also showed a significant move to the downside on the day, resulting in a 2.4 percent nosedive by the NYSE Arca Airline Index.

Crude oil futures ended marginally lower on Thursday after trading in a narrow range as recent data showing a surge in U.S. crude inventories last week continued to weigh on the commodity. However, optimism about higher demand for oil from China helped limit the drop in the commodity's prices. According to a report from International Energy Agency (IEA), China is likely to buy an additional 500,000 barrels per day this year, accounting for almost half of the 2023 global oil demand growth this year, following an end to COVID-19 curbs that had strongly curbed energy usage in the country. Benchmark crude oil futures for March delivery fell $0.10 to $78.49 a barrel on the New York Mercantile Exchange. Brent crude for April delivery lost $0.43 or 0.5 percent at $84.95 a barrel (Provisional) on London's Intercontinental Exchange.

Indian rupee strengthened against the dollar on Thursday, supported by broad dollar weakness and a positive trend in domestic equities. Sentiments were upbeat after continued buying in foreign institutional investor (FII) pattern. Besides, fresh set of data indicated a strong economy. The currency took some support with report that the trade deficit touched a 12-month low of $17.75 billion during the month. Meanwhile, imports in January 2023 contracted by 3.63 per cent, the second consecutive month, to $50.66 billion, while India's Merchandise exports dipped by 6.58 per cent to $32.91 billion in January 2023 as against $ 35.23 billion in the same month last year. On the global front, dollar stalled on Thursday as investors showed a higher risk appetite on signs the overall global growth outlook is improving following a slew of strong U.S. economic data, even as the Federal Reserve looks set to raise interest rates further. Finally, the rupee ended at 82.70 (Provisional), stronger by 13 paise from its previous close of 82.83 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 8575.39 crore against gross selling of Rs 7804.36 crore, while in the debt segment, the gross purchase was of Rs 208.98 crore against gross selling of Rs 514.64 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.73 crore against gross selling of Rs 8.20 crore.

The US markets ended lower on Thursday as wholesale inflation data fuelled rate hike concerns. Asian markets are trading mixed on Friday following a sell-off on Wall Street overnight. Indian markets ended marginally higher on Thursday amid volatility faced during the last minutes of trading hours as concerns over rising inflation and fears of monetary tightening worldwide hit the sentiment. Today, markets are likely to get negative start tracking lackluster global cues. Though, foreign fund inflows likely to support domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 1,570.62 crore on February 16, NSE's provisional data showed. Some support may come with a private report that India's gross domestic product (GDP) is expected to grow at 6.2 per cent in FY24 as drivers of domestic demand remain intact amid fears of an impending slowdown. Traders may take note of economic think tank Global Trade Research Initiative (GTRI) report that the country's merchandise exports have recorded a healthy growth in both value and volume terms in 2022. The outbound shipments rose by 14.6 per cent year-on-year to $453.3 billion in 2022. Meanwhile, the GST Council in its meeting on February 18 is likely to discuss setting up appellate tribunals and mechanism to curb tax evasion in pan masala and gutkha business. There will be some reaction in power stocks with a private report that India will blacklist renewable power companies for three-to-five years if they do not meet project completion deadlines. Jewelry industry stocks will be focus with a private report that India's January gold imports plunged 76% from a year earlier to a 32-month low on subdued demand after domestic prices rallied to record highs and as jewellers postponed purchases, hoping for a reduction in import duty. There will be some buzz in the steel stocks as steel Minister Jyotiraditya Scindia said that large scale augmentation would be done to double steel production from the existing 150 million tonnes to 300 million tonnes per annum by 2030. Telecom stocks will be in limelight as telecom regulator TRAI said in its monthly subscriber report said Telecom subscriber base rose marginally to 1,170.38 million in December 2022 on account of an increase in fixed line connections. Meanwhile, Adani Group stocks would be in focus after executives unveiled plans to refinance two dollar bonds and prepay share pledges.

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

Nifty Top volumes

• NTPC is planning to raise term loan of $750 million (about Rs 6,213 crore) in Japanese Yen (JPY) denomination to finance its capital expenditure on new and ongoing projects. 
• Nestle India has reported 65.51% rise in its net profit at Rs 628.06 crore for fourth quarter ended December 31, 2022 as compared to Rs 379.48 crore for the same quarter in the previous year.
• NSDC has entered into a partnership with HDFC Life Insurance Company to impart skills among youth in the insurance sector, in a bid to facilitate livelihood creation and promote entrepreneurship opportunities.
• HCL Technologies has been rated as a leader in Everest Group's 'IT Security Services PEAK Matrix Assessment 2022 - North America' report.