Declining for second consecutive day, Indian equity benchmarks settled with losses of over half percent on Friday, in tandem with a weak trend in overseas markets amid hawkish tone of global central banks. After witnessing volatility in initial trade, Indian benchmarks faced selloff in morning deals as traders were concerned with a private report that India's current account deficit likely rose to its highest in nearly a decade in the July-September quarter as elevated commodity prices and a weak rupee stretched the trade gap even further. Some concern also came as the government data showed that India's exports recorded a flat growth of 0.59 per cent to $31.99 billion in November, even as trade deficit widened to $23.89 billion during the month. Exports stood at $31.8 billion in November last year. Imports rose by 5.37 per cent to $55.88 billion in November as compared to $53.03 billion in the corresponding month a year ago. However, markets witnessed recovery and key indices erased almost all of their losses in noon deals as traders found some support with Icra Ratings' report stating that led by retail-focused players, non-banking financial companies (NBFCs) are likely to close the current fiscal and the next with a loan growth of 10-12 per cent and see around 50 basis points improvement in profitability. Some relief also came amid a private report stating that India is growing faster than what is captured by the country's official data, and it presents a case for an upgrade of equities outlook. But, recovery proved short-lived and markets once again witnessed selling pressure in last leg of trade as sentiments got hit with report stating that investments by private equity and venture capital funds have declined by 42 per cent year-on-year to $4 billion in November. Traders failed to take support from report that government has slashed the windfall profit tax levied on domestically-produced crude oil as well as on export of diesel and ATF following a drop in global oil prices. Finally, the BSE Sensex fell 461.22 points or 0.75% to 61,337.81 and the CNX Nifty was down by 145.90 points or 0.79% to 18,269.00.

Extending their previous session's losses, the US markets settled lower for third straight session on Friday amid ongoing concerns about the outlook for interest rates and the economy. The Fed's hawkish tone in Wednesday's monetary policy announcement has added to worries about the central bank's aggressive rate hikes tipping the economy into a recession. While inflation has recently shown signs of slowing, the Fed signaled it plans to continue raising interest rates next year. A recent batch of disappointing economic data has led to fears the Fed's fight against inflation is already taking its toll on the economy. Investors are looking ahead to the Commerce Department's report on personal income and spending in coming week, which includes a reading on inflation said to be preferred by the Fed. On the sectoral front, interest rate-sensitive commercial real estate stocks turned in some of the worst performances on the day, dragging the Dow Jones U.S. Real Estate Index down by 2.6 percent to its lowest closing level in over a month. Significant weakness was also visible among natural gas stocks, as reflected by the 2.1 slump by the NYSE Arca Natural Gas Index. The sell-off by natural gas stocks came amid a steep drop by the price of the commodity, with natural gas for January delivery plunging $0.37 or 5.3 percent to $6.60 per million BTUs. Airline, utilities and oil service stocks also saw considerable weakness on the day, moving lower along with most of the other major sectors.

Crude oil futures closed significantly lower on Friday with losses of over 2% amid fears of a global economic slowdown that could lead to lower energy demand, as major central banks indicated interest rates will continue to rise and remain elevated next year. Also, the surge in Covid cases in China weighted down on oil futures. Besides, prices got dampened amid reports that U.S. Strategic Petroleum Reserve would loan out 2 million barrels to domestic energy companies to relieve any supply shortage caused by the Keystone pipeline's closure. Benchmark crude oil futures for January delivery declined $1.82 or 2.4 percent at $74.29 a barrel on the New York Mercantile Exchange. Brent crude for February delivery fell $2.17 or 2.7 percent to settle at $79.04 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee concluded weaker against dollar on Friday on account of continued dollar demand from importers and banks and lackluster trend in domestic equities. Traders were concerned as the government data showed that India's exports recorded a flat growth of 0.59 per cent to $31.99 billion in November, even as trade deficit widened to $23.89 billion during the month. Exports stood at $31.8 billion in November last year. Imports rose by 5.37 per cent to $55.88 billion in November as compared to $53.03 billion in the corresponding month a year ago. Besides, investments by private equity and venture capital funds have declined by 42 per cent year-on-year to $4 billion in November. On the global front, dollar was little changed on Friday after jumping in the previous session, as traders analysed a raft of central bank rate hikes and grappled with the prospect that borrowing costs still have a way to climb. Finally, the rupee ended at 82.85 (Provisional), weaker by 9 paise from its previous close of 82.76 on Thursday.

The FIIs as per Friday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 8094.97 crore against gross selling of Rs 6556.64 crore, while in the debt segment, the gross purchase was of Rs 164.97 crore against gross selling of Rs 459.78 crore. Besides, in the hybrid segment, the gross buying was of Rs 18.86 crore against gross selling of Rs 2.15 crore.

The US markets ended lower on Friday as investors continued to fret about a hawkish Fed that appears determined to keep interest rates high through 2023. Asian markets are trading mostly in red on Monday as investors struggled to shake off recession fears. Indian markets closed notably lower for a second straight session, as stocks tumbled on Friday amid rising concerns about global economic slowdown. Today, markets are likely to start new week in green on the back of buying support by FIIs and sustained downtick in Crude Oil prices. After investing over Rs 36,200 crore last month, foreign investors continued their positive momentum and have injected a net Rs 10,555 crore in Indian equities so far in December amid stabilisation in oil prices and moderating US inflation. Sentiments will get boost as the gross direct tax collections have grown 26 per cent to over Rs 13.63 lakh crore so far this fiscal, aided by TDS deductions and healthy corporate advance tax mop-up. Some support will come as data released by the Reserve Bank showed that India's forex reserves rose by USD 2.908 billion to USD 564.06 billion for the week ended on December 9. In the previous reporting week, the overall reserves had soared by USD 11 billion to USD 561.16 billion. This is the fifth consecutive week of an increase in the reserves. Traders may took note of a report that the Department for Promotion of Industry and Internal Trade (DPIIT) is working closely with 24 sectors, including electronics, textiles and auto components, to boost domestic manufacturing, increase exports and cut down imports. However, upside may remain capped amid weak global cues. Some cautiousness may come as Icra Ratings in a report said that with exports continuing to remain under stress for the second consecutive month in November, and imports also falling, the current account deficit is likely to moderate in the second half and close the fiscal with a 3.3 percent of GDP or $108-112 billion, which still be a record high. There will be some buzz in banking stocks as latest Reserve Bank of India (RBI) data showed that bank credit grew by 17.5 per cent year-on-year (YoY) to Rs 131.06 trillion in the fortnight ended December 2, reflecting the continuation of firm demand for loans in the economy. Oil & gas industry stocks will be in focus as data of the commerce ministry showed that the country's imports of Crude oil rose by 52.58 per cent to USD 146.57 billion during April-November period this fiscal. There will be some reaction in auto stocks with report that the Indian automobile industry is setting out on a journey with hopes for a sustained growth momentum in 2023 and further embracing clean technology amid the lurking speed breakers of rising interest rates and cost increases due to new emission and safety norms, having witnessed a strong comeback from the COVID-led downturn this year.

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

Nifty Top volumes

• Tata Motors has signed a memorandum of understanding with Everest Fleet for the delivery of 5000 XPRES-T EVs. 
• Wipro has entered into a partnership with Finastra to drive digital transformation for corporate banks in the Middle East.
• Reliance Industries' subsidiary company -- Reliance Digital Health has signed definitive agreements with Synchron to acquire 2.25% stake (on a fully diluted basis) in Synchron. 
• Tech Mahindra and IQM Quantum Computers have signed a Memorandum of Understanding for research in quantum computing.