Indian equity benchmarks ended the Friday's trade in red terrain as traders opted to book profit especially in IT names that came out with their quarterly numbers. Markets started the session with caution as traders were concerned as India registered 15,515 fresh Covid-19 cases in the last 24 hours, taking the tally to 10,528,346. Traders were also seen taking a note of reports that Former Reserve Bank of India (RBI) Governor Raghuram Rajan says the government should take advantage of the peaks in the Indian equity markets right now and sell stakes in PSUs while prioritising spending to get the economy back on track. He said the upcoming Budget for the fiscal year beginning April 1 should look to provide relief to the poorer households and small and medium enterprises. Sentiments also remained dampened after rating agency CRISIL's report which projected CPI Inflation at 6.4% for fiscal 2021 (FY21). It mentioned that after eight months above the Reserve Bank of India (RBI's) target band of 2-6%, Consumer Price Index (CPI) inflation was finally back in range, declining for the second straight month to a below-consensus 4.6% in December, from 6.9% in November. Average CPI inflation during April-December now measures 6.6%, down from the April-November average of 6.9%.Market participants overlooked report that Prime Minister Narendra Modi will launch India's Covid-19 vaccination drive tomorrow via video conferencing. This will be the world's largest vaccination programme covering the entire length and breadth of the country. Meanwhile, the government has notified a modified scheme to provide financial assistance to distilleries producing first-generation ethanol from feedstocks, including cereals. Finally, the BSE Sensex fell 549.49 points or 1.11% to 49,034.67, while the CNX Nifty was down by 161.90 points or 1.11% to 14,433.70.

The US markets settled sharply lower on Friday amid negative reaction to earnings news from financial giants Wells Fargo (WFC), Citigroup (C) and JPMorgan Chase (JPM). Wells Fargo and Citigroup posted steep losses after both reported better than expected fourth quarter earnings but on revenues that missed estimates. Shares of JPMorgan also moved notably lower even though the company reported fourth quarter results that beat expectations on both the top and bottom lines. Negative sentiment was also generated in reaction to a report from the Commerce Department showing a continued decline in US retail sales in the month of December. The Commerce Department said retail sales fell by 0.7 percent in December after tumbling by a revised 1.4 percent in November. Street had expected retail sales to come in unchanged compared to the 1.1 percent slump originally reported for the previous month. Meanwhile, the Federal Reserve released a separate report showing US industrial production jumped by much more than expected in the month of December. The Fed said industrial production surged up by 1.6 percent in December after climbing by an upwardly revised 0.5 percent in November. Street had expected production to rise by 0.4 percent, matching the increase originally reported for the previous month. The weakness on Wall Street may also have reflected the old adage of sell the news after President-elect Joe Biden announced a $1.9 trillion coronavirus relief package on Thursday. The proposed stimulus package includes an increase in direct payments to individuals, increased federal unemployment benefits and aid to state and local governments.

Crude oil futures ended lower on Friday pressured as fresh outbreaks of COVID-19 in China dulled the outlook for energy demand. China has put about 22 million people on lockdown due to new outbreaks of Covid-19 in the north and northeastern parts of the country. Meanwhile, a report from Baker Hughes said the number of active US rigs drilling for oil rose by 12 to 287 this week, rising for an eighth successive weak. The total US rigs count went up by 13 to 373. Concerns over rising Sino-US tensions also weighed on the commodity after the US government blacklisted Chinese smartphone maker Xiaomi Corp and ten other companies over alleged military links. Crude oil futures for February declined $1.21 or 23 percent to settle at $52.36 a barrel on the New York Mercantile Exchange. March Brent crude lost $1.32 or 2.3 percent to settle at $55.10 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally weaker against the American currency on Friday, tracking weaker Asian peers and heavy selloffs in domestic equities. Sentiments were dampened as rating agency CRISIL projected CPI Inflation at 6.4% for fiscal 2021. It said after eight months above the Reserve Bank of India (RBI's) target band of 2-6%, Consumer Price Index (CPI) inflation was finally back in range, declining for the second straight month to a below-consensus 4.6% in December, from 6.9% in November. On the global front, pound rose against the euro on Friday, touching an almost two-month high, after data showed Britain's national lockdown in November was less damaging for the economy than expected. Finally, the rupee ended at 73.07, 3 paise weaker from its previous close of 73.04 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 10739.46 crore against gross selling of Rs 9127.74 crore, while in the debt segment, the gross purchase was of Rs 621.12 crore with gross sales of Rs 950.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 30.02 crore against gross selling of Rs 16.00 crore.

The US markets closed in red on Friday pressured by intensifying lockdowns and weak US retail sales data. Asian markets are trading in mixed on Monday as disappointing news on US consumer spending tempered risk sentiment ahead of a closely-watched reading on the health of the Chinese economy. Indian markets ended over a percent lower on Friday as major selling was seen in all sectors during the day. Today, the start of new week is likely to be weak amid sell-off in global markets. There will be some cautiousness as India registered 13,962 fresh Covid-19 cases in the last 24 hours, taking the tally to 10,572,672. Globally, more than 95.4 million people have been infected by the virus. Investors will keep tracking latest developments and trends on the COVID-19 pandemic front, especially the vaccine rollout in the country that kicked off on January 16 in the country and for signs of any adverse reactions from the vaccine. However, some respite may come later in the day with the government data showing that India's exports rose marginally to $27.15 billion in December 2020, while imports surged 7.56 per cent to $42.59 billion. The merchandise exports were valued at $27.11 billion in December 2019, while imports had totalled $39.59 billion. Some support will come with former chief economic adviser Arvind Virmani's statement that the Indian economy is likely to contract in the range of 5-7.5 per cent this fiscal but will see a growth of 9 to 11 per cent in FY 2021-22. Market participants may take note that IMF Managing Director Kristalina Georgieva praised India for taking very decisive steps to deal with the coronavirus pandemic and its economic consequences and asked the country to do more this year to support an accelerated transformation of the economy. Besides, foreign portfolio investors (FPI) put in Rs 14,866 crore in Indian markets in the first half of January with participants expecting strong third-quarter results by companies. Auto stocks will be in limelight with Union Minister Nitin Gadkari's statement that the much-awaited policy to scrap 15-year old vehicles is likely to get government nod soon. Banking stocks will be in focus as Bank credit grew 3.2 per cent to Rs 107.05 lakh crore in the first nine months of the current financial year, against a growth of 2.7 per cent registered in the corresponding period of 2019-20. In the fortnight ended March 27, 2020, bank advances stood at Rs 103.72 lakh crore. Meanwhile, two companies -- Indian Railway Finance Corporation and Sequoia Capital-backed Indigo Paints -- are set to hit the market with their initial share-sale offers during the week to raise an estimated over Rs 5,800 crore. The three-day initial share-sale of Indian Railway Finance Corporation (IRFC) would be open for public subscription during January 18-20, while the IPO of Indigo Paints would open on January 20 and conclude on January 22.

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

Nifty Top volumes

• Bharti Airtel has divested its stake in Seynse Technologies held through Nettle Infrastructure Investments, a wholly-owned subsidiary of the Company.
• SBI's foreign currency bonds of $600 million, under its $10 billion global Medium Term Note Programme, have been listed on India INX's GSM platform. 
• Bajaj Finance has raised Rs 222 crore through Secured redeemable NCDs and allotted 2220 NCDs having face value of Rs 10 each on Private Placement basis. 
• Maruti Suzuki India has launched their online financing platform - Smart Finance for Maruti Suzuki ARENA customers across 30 plus cities.