Snapping their two-day winning run, Indian equity benchmarks settled with losses of over half percent on Thursday amid weak global cues and weekly F&O expiry. Markets opened on a negative note and continued to drift lower throughout the day, as traders were anxious after global rating agency Fitch warned that rapid loan growth, especially in unsecured retail credit, needs careful management to avoid a spike in risks and credit costs for India's banks and finance companies. Some cautiousness crept in as Crisil Market Intelligence and Analytics in its note has said that urban poor have been the most impacted by 15-month high consumer price inflation (CPI) in July. The high-income segment in urban areas faced the lowest inflation burden, as food has a relatively low share in their consumption basked. It noted that poorest segment in urban areas faced highest inflation rate in July. Markets extended fall in late afternoon deals, even as exchange data showed Foreign Institutional Investors (FIIs) turned buyers on Wednesday as they bought equities worth Rs 722.76 crore. The street took a note of a private report stating that India will take a medium-term view to intensify efforts to ease inflation pressures and avoid any knee-jerk reaction to transitory price increases. Finally, the BSE Sensex fell 388.40 points or 0.59% to 65,151.02 and the CNX Nifty was down by 99.75 points or 0.51% to 19,365.25.

The US markets ended lower on Thursday, magnifying recent losses, amid concerns the Federal Reserve will hold interest rates higher for longer to control inflation. Further, weakness also prevailed in the markets as yields on long term Treasury Notes climbed to a 16-year high. In the stock specific developments, Walgreens Boots Alliance fell more than 3 percent. Boeing, United Health, Apple, Home Depot, Salesforce.com and Nike declined 1.4 to 2.3 percen. Meta Platforms shares ended more than 3 percent down. Intel, Apple Inc and Microsoft also closed notably lower. Walmart shares ended lower by more than 2 percent despite the company lifting its annual guidance after second quarter results beat expectations. However, Cisco Systems climbed about 3.3 percent, lifted by better than expected fourth-quarter results. On the economic data front, data from the Labor Department showed first-time claims for U.S. unemployment benefits saw a modest decline in the week ended August 12th. The report said initial jobless claims slipped to 239,000, a decrease of 11,000 from the previous week's revised level of 250,000. Street had expected jobless claims to dip to 240,000 from the 248,000 originally reported for the previous week. Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 234,250, an increase of 2,750 from the previous week's revised average of 231,500. A report from the Federal Reserve Bank of Philadelphia said the Philadelphia Fed manufacturing index increased to +12 in August, up from -13.5 in July.

Crude oil futures ended higher on Thursday on reports about China's central bank seeking to boost the economy. The People's Bank of China said that it would keep liquidity reasonably ample and maintain precise and forceful policy to support economic recovery against headwinds. The bank said that it will better leverage the dual functions of aggregate and structural monetary policy tools and firmly support the recovery and development of the real economy. Benchmark crude oil futures for September delivery rose $1.01 or about 1.3 percent to settle at $80.39 a barrel on the New York Mercantile Exchange. Brent crude for October delivery gained $0.67 or 0.80 percent to settle at $84.12 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Thursday weighed down by a strong greenback overseas and a negative trend in domestic equities. Traders were cautious as global rating agency Fitch warned that rapid loan growth, especially in unsecured retail credit, needs careful management to avoid a spike in risks and credit costs for India's banks and finance companies. Besides, Crisil Market Intelligence and Analytics said that urban poor have been the most impacted by 15-month high consumer price inflation (CPI) in July. On the global front, Russian rouble strengthened against the dollar on Thursday, in a volatile week filled with speculation over how the authorities might stabilise the currency after a 350-basis-point rate hike appeared to have only a limited effect. Finally, the rupee ended at 83.09 (Provisional), weaker by 1 paisa from its previous close of 83.08 on Monday.

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 29038.45 crore against gross selling of Rs 20394.97 crore, while in the debt segment, the gross purchase was of Rs 800.65 crore with gross sales of Rs 450.15 crore. Besides, in the hybrid segment, the gross buying was of Rs 96.46 crore against gross selling of Rs 87.65 crore.

The US markets ended lower on Thursday as losses in healthcare stocks eclipsed gains in Cisco and energy stocks, while upbeat economic data kept alive fears of interest rates remaining higher for longer. Asian markets are trading mostly in red on Friday as investors assessed Japan's July inflation data as well as China's real estate giant Evergrande filed for bankruptcy, adding to the slowdown worries for the world's second largest economy. Indian markets settled in the negative territory on Thursday, tracking losses in index majors Reliance Industries, ITC and HDFC bank amid a weak trend in global markets. Today, start of session is likely to be pessimistic amid a high risk off sentiment on surging bond yields and weakness across global equities. Foreign fund outflows likely to dent sentiments. Foreign institutional investors (FII) sold shares worth net Rs 1,510.86 crore on August 17. Traders will be concerned as the Reserve Bank of India's monthly bulletin said headline inflation is expected to average well above 6 per cent in the second quarter. It noted headline inflation, after reaching a low of 4.3 per cent in May 2023, rose in June and is expected to surge during July-August led by vegetable prices. However, some support may come as a private report said that India is likely to benefit from the supply chain shift happening owing to the US-China trade war, deglobalization and pandemic disruptions. Traders may take note of Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar's statement as he forecast that the digital economy will contribute more than 20 per cent of the country's GDP in 2026. He said India is a preeminent nation that adopted technology very fast and has started offering solutions to the world. Oil companies and sugar industry stocks will be in focus as the government is banking on ethanol to meet its target of blending 5 per cent biodiesel in diesel sales by 2030. Widely used in Europe, biodiesel refers to biodegradable fuel traditionally manufactured from vegetable oils, animal fats, or recycled restaurant grease. There will be some reaction in power stocks with a private report that India experienced a new peak in power demand, reaching a record 233 gigawatt (Gw) on Wednesday due to rising temperatures as the monsoon retreats across the country. Moreover, the NSE has announced a rejig in its key indices, excluding ACC, Nykaa, HDFC AMC, Indus Towers and Page Industries from the Nifty Next 50 index, effective from September 29. These will be replaced by PNB, Shriram Finance, Trent, TVS Motor and Zydus Life.

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

Nifty Top volumes

• M&M is eyeing electric vehicle production at its upcoming plant in Chakan in Maharashtra to hit peak production mark of 2 lakh units per annum between 2027 and 2029. 
• Bharti Airtel's arm -- Airtel Payments Bank has reported 41% year-on-year growth in revenue to Rs 400 crore in the first quarter ended June 30, 2023. 
• Bajaj Finance has lowered the home loan interest rates. 
• Tech Mahindra has entered into a partnership with Anyverse, a hyperspectral synthetic data generation platform that accelerates the development of computer vision-based solutions for autonomous applications.