Indian equity benchmarks managed to erase intraday losses in the final trading hour to end above the flat line on Thursday. Key gauges started the session in red territory and stayed in red for most part of the day, as traders remained cautious with former deputy chairman of the erstwhile Planning Commission Montek Singh Ahluwalia said it would be unrealistic to assume that India would record a sustained growth of 8 per cent, which is needed to become a developed nation by 2047. Domestic sentiments remained weak amid a private report stating that India's economy grew at a slower pace than the monetary policy committee's (MPC's) projection of 16.2 per cent in the first quarter of financial year 2022-23 (Q1FY23). Their projections range between 14.5 per cent and 16 per cent. However, key gauges reversed losses and ended with gains, taking support from report stated that with RBI hiking the lending rate, the Union Cabinet earmarked Rs 34,856 crore towards the interest subvention scheme to help banks provide short term agriculture loans of up to Rs 3 lakh at a rate of 7 per cent. Information and Broadcasting Minister Anurag Singh Thakur said the Cabinet has decided to restore interest subvention on short term agriculture loans to 1.5 per cent for all financial institutions. Some support also came as the ministry of statistics and programme implementation in its final Annual Survey of Industries (ASI) said manufacturing sector investments grew 20.9% in 2019-20 over the previous fiscal. Besides, the latest exchange data showed foreign institutional investors remained net buyers in the capital market on Wednesday as they purchased shares worth Rs 2,347.22 crore. Finally, the BSE Sensex rose 37.87 points or 0.06% to 60,298.00 and the CNX Nifty was up by 12.25 points or 0.07% to 17,956.50.

The US markets ended marginally higher on Thursday, after swinging between modest gains and losses as mixed economic data failed to spark a broad conviction trade. The Federal Reserve Bank of Philadelphia released a report showing regional manufacturing activity unexpectedly returned to growth in the month of August. The Philly Fed said its diffusion index for current activity jumped to a positive 6.2 in August from a negative 12.3 in July, with a positive reading indicating growth. Street had expected the index to rebound to a negative 5.0. Meanwhile, the Labor Department released a report unexpectedly showing a modest pullback in first-time claims for US unemployment benefits in the week ended August 13th. The Labor Department said initial jobless claims edged down to 250,000, a decrease of 2,000 from the previous week's revised level of 252,000. Street had expected jobless claims to inch up to 265,000 from the 262,000 originally reported for the previous week. However, the National Association of Realtors (NAR) released a report showing another significant decrease in existing home sales in the month of July. NAR said existing home sales plunged by 5.9 percent to an annual rate of 4.81 million in July after tumbling by 5.5 percent to a revised rate of 5.11 million in June. Street had expected existing home sales to slump by 4.5 percent to a rate of 4.89 million from the 5.12 million originally reported for the previous month. On the sectoral front, Energy stocks moved sharply higher, however, benefiting from a substantial increase by the price of crude oil. Crude for September delivery surged $2.39 to $90.50 a barrel amid renewed supply concerns. Significant strength was also visible among networking stocks, as reflected by the 2.9 percent jump by the NYSE Arca Networking Index.  

Crude oil futures settled sharply higher on Thursday, extending their previous session's rally, as investors weighed hopes for strong fuel demand after a larger-than-expected drawdown in US crude stocks. Prospects of a drop in oil supply from Russia during the later part of the year due to bans by the European Union on Russian oil exports contributed as well to the jump in crude prices. Meanwhile, traders also noted a report about supply constraints after OPEC Secretary General Haitham Al Ghais said global oil markets remained at the risk of a supply squeeze. Benchmark crude oil futures for September delivery rose $2.39 or about 2.7 percent to settle at $90.50 a barrel on the New York Mercantile Exchange. Brent crude for October delivery surged $2.94 or 3.13 percent to settle at $96.59 a barrel on London's Intercontinental Exchange.

Indian rupee ended considerably lower against dollar on Thursday on emergence of demand for the greenback from importers. Sentiments were negative as aggressive rate hikes by the Fed and central banks in Europe and Asia to control inflation that is running at multi decade highs might disrupt global economic growth. Federal Reserve's July meeting pointed to US interest rates staying higher for longer to bring down inflation back to its 2% target. Traders were also worried as former deputy chairman of the erstwhile Planning Commission Montek Singh Ahluwalia said it would be unrealistic to assume that India would record a sustained growth of 8 per cent, which is needed to become a developed nation by 2047. On the global front, pound weakened against the dollar on Thursday as soaring UK inflation would mean higher interest rates and a weaker British economy. Finally, the rupee ended at 79.64 (Provisional), weaker by 19 paisa from its previous close of 79.45 on Wednesday.

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs10630.31 crore against gross selling of Rs 6322.18 crore, while in the debt segment, the gross purchase was of Rs 456.17 crore against gross selling of Rs 442.66 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.64 crore against gross selling of Rs 6.36 crore.

The US markets ended higher on Thursday as an upbeat sales forecast from Cisco Systems helped to lift the technology sector, while data showed the economy remained relatively strong. Asian markets are trading mixed on Friday as recession clouds gathered over Europe and highlighted the relative outperformance of the US economy. Indian markets finished a choppy session in the green on Thursday, with the Nifty50 taking its winning spree to the eighth session in a row. Today, markets are likely to get flat-to-negative start amid mixed Asian cues and elevating crude oil prices. Traders will be concerned as an analysis of industrial output and merchandise exports by India Ratings and Research suggested that the Indian manufacturing sector, which received a fillip in FY22 due to export growth, is likely to be hit by a slump in foreign trade activity in FY23. Some cautiousness will come as an RBI article has warned that big bang privatisation of public sector banks can do more harm than good, and asked the government to take a nuanced approach on the issue. Outflow of foreign funds may impact the sentiments in domestic markets. Foreign institutional investors (FIIs) turned net sellers for the first time in current month, offloading shares worth Rs 1,706 crore on August 18, as per provisional data available on the NSE. However, some support may come with the Reserve Bank of India's state of the economy report showing that the fall in consumer price index (CPI)-based inflation to 6.7 per cent in July from 7 per cent in the previous month was a heartening development, and retail inflation may ease to 5 per cent by the first quarter of the next financial year before hitting the target of 4 per cent. Meanwhile, the Ministry of Ports, Shipping and Waterways has released a draft to amend the Indian Ports Act, 1908, which aims to bring in sweeping reforms in the sector by bringing non-major ports into the national fold, creating a new mechanism for resolution of disputes, and empowering maritime state development council (MSDC). Aviation industry stocks will be in focus as DGCA data showed that domestic air traffic in July fell 7.7 per cent sequentially to 9.7 million on the back of seasonality and higher fares. There will be some buzz in banking stocks with a private report stating that The net profit of the banks rose by 37.1 per cent year-on-year to Rs 44,048 crore in the first quarter of the current financial year. Shares of OMCs and aviation will be in limelight as the government again revised the newly-introduced windfall tax. The tax on domestically produced crude oil has been reduced to Rs 13,000 per tonne from Rs 17,750 per tonne, while export taxes on jet fuel has been hiked to Rs 2 per litre from zero. The excise duty on the export of diesel has been hiked to Rs 7 per litre from Rs 5 per litre earlier. The excise duty on the export of petrol continues to be nil. The new rates will be applicable from August 19.

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

Nifty Top volumes

• ONGC has signed a Heads of Agreement with global oil giant ExxonMobil Corp for exploration of oil and gas in the deepsea on the country's east and west coasts. 
• Tata Motors has won an order of 921 electric buses from Bengaluru Metropolitan Transport Corporation. 
• Bharti Airtel has added 7,93,132 customers in June, 2022.
• Maruti Suzuki India has launched the All-New Alto K10.