Indian equity benchmarks ended lower on Thursday after a two-day rally, dragged by losses in Utilities, Power and FMCG stocks. Key gauges made a negative start and stayed in red for whole day, as traders were cautious with exchange data showing that foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 319.23 crore. Some pessimism also came as IMF's Gita Gopinath said that the global economy is facing a unique situation due to unprecedented level of high inflation and that is causing tension between monetary and fiscal policies. However, key indices managed to trim some losses in afternoon deals, as traders found some solace with a private report stating that India is likely to become a $26-trillion economy in 100th year of its Independence in 2047 with per capita GDP growing six times from current level to over $15,000 during the period. Some support also came as India has reiterated its position as a resilient economy with a strong leadership providing stable policy to the global investors at the World Economic Forum (WEF) at Davos. India's focus areas at WEF this year are investment opportunities, infrastructural landscape and its inclusive & sustainable growth story. But, markets failed to hold recovery and ended in red as global mood turned sour after weaker-than-expected US economic data. Traders overlooked Union Minister Ashwini Vaishnaw's statement that India took a very pragmatic approach in dealing with the humanitarian and economic crises triggered by the Covid-19 pandemic and that has ensured moderate inflation and high growth in the country. Finally, the BSE Sensex fell 187.31 points or 0.31% to 60,858.43 and the CNX Nifty was down by 57.50 points or 0.32% to 18,107.85.

The US markets ended lower on Thursday, magnifying their previous session's losses. Concerns about the economic outlook continued to weigh on the markets following Wednesday's disappointing retail sales and industrial production data. Traders also remain concerned about the outlook for interest rates amid worries the Federal Reserve will continue aggressively raising rates despite signs of a slowdown in inflation. While the Fed is widely expected to further slow the pace of rate hikes to 25 basis points at its next meeting, traders are expressing some uncertainty about the possibility of further rate hikes. Adding to the concerns about interest rates, a report released by the Labaor Department unexpectedly showed a decrease in first-time claims for U.S. unemployment benefits in the week ended January 14th. The Labor Department said initial jobless claims fell to 190,000, a decrease of 15,000 from the previous week's unrevised level of 205,000. The dip surprised participants, who had expected jobless claims to rise to 214,000. On the sectoral front, semiconductor stocks saw substantial weakness on the day, resulting in a 2.8 percent nosedive by the Philadelphia Semiconductor Index. Considerable weakness was also visible among housing stocks, as reflected by the 2.3 percent slump by the Philadelphia Housing Sector Index. Retail stocks also showed a significant move to the downside, dragging the Dow Jones U.S. Retail Index down by 2.1 percent.

Crude oil futures ended higher on Thursday as hopes about higher demand from China. According to private report, Chinese oil demand increased by nearly 1 million barrels per day to 15.41 million barrels per day in November 2022, the highest level in about nine months. However, data from U.S. Energy Information Administration (EIA) showed crude inventories in the U.S. rose by 8.4 million barrels last week (January 13), as against forecast for a decline of 593,000 barrels. Gasoline stockpiles increased by 3.483 million barrels last week, higher than an expected increase of 2.529 million barrels. Meanwhile, distillate stockpile dropped 1.939 million barrels in the week, as against expectations for a rise of 122,000 barrels. Benchmark crude oil futures for February delivery rose $0.85 or 1.1 percent at $80.33 a barrel on the New York Mercantile Exchange. Brent crude for March delivery gained $1.18 or 1.4 percent at $86.16 a barrel on London's Intercontinental Exchange.

Indian rupee tumbled against dollar on Thursday, weighed down by a muted trend in domestic equities and foreign fund outflows. Sentiments turned pessimistic with IMF managing director Gita Gopinath's statement that the global economy is facing a unique situation due to unprecedented level of high inflation and that is causing tension between monetary and fiscal policies. On the global front, dollar slipped on Thursday after a raft of data showed the U.S. economy is losing momentum, while the yen rebounded as traders continued to bet the Bank of Japan will shift away from ultra-loose monetary policy. U.S. data released on Wednesday showed retail sales fell by the most in a year in December and manufacturing output suffered its biggest drop in nearly two years, stoking fears that the world's largest economy is headed for a recession. Finally, the rupee ended at 81.37 (Provisional), weaker by 7 paise from its previous close of 81.30 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 Rs 8491.67 crore against gross selling of Rs 8437.08 crore, while in the debt segment, the gross purchase was of Rs 832.46 crore against gross selling of Rs 706.51 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.83 crore against gross selling of Rs 15.15 crore.

The US markets ended lower on Thursday as investors grew increasingly concerned the Federal Reserve will keep raising rates despite signs of slowing inflation. Asian markets are trading mostly in green on Friday as investors digested Japan's inflation data. The nationwide core consumer price index rose 4% in December on an annualized basis, the fastest pace since 1981. Indian markets ended lower on Thursday after a two-day rally, mirroring a weak trend overseas and a weak rupee and foreign fund outflows also weighed on sentiment. Today, markets are likely to make positive start tracking gains in other Asian counterparts. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 399.98 crore on January 19, as per provisional data available on the NSE. Some support will come as the Reserve Bank of India's (RBI's) January 2023 Bulletin stated that lead indicators suggest that domestic current account deficit (CAD) is likely to reduce in 2023, while macro-economic stability has received a boost from inflation being brought back to the official tolerance band. Traders may take note of a private report that the Indian government is likely to set a conservative target for the funds it can raise through the disinvestment of state enterprises in fiscal 2024 after mop-up fell short this year, Meanwhile, the union finance ministry has asked banks to achieve targets given under the flagship financial inclusion and social security schemes for the current financial year. There will be some buzz in the sugar industry stocks as Food Secretary Sanjeev Chopra said the government will take a decision next month on increasing the sugar export quota from current 60 lakh tonnes after assessing the domestic production and internal demand. Banking stocks will be in focus as Moody's Investors Service in its latest report on the banking sector in emerging markets stated that the asset quality of Indian banks and those in Southeast Asian countries will be stable in 2023. There will be some reaction in aviation industry stocks as aviation regulator DGCA said domestic air traffic continued to register growth as passengers carried by domestic airlines during January-December 2022 were 12.32 crore as against 8.38 crore during the corresponding period of previous year thereby registering annual growth of 47.05 per cent and monthly growth of 13.69 per cent. Automobile stocks will be in limelight after the government said that from April 1, all vehicles owned by central and state governments, including buses owned by transport corporations and public sector undertakings that are older than 15 years will be de-registered and scrapped. Traders will also be eyeing some important earnings announcement including that of Reliance Industries.

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

Nifty Top volumes

• State Bank of India has raised Rs 9,718 crore through its second infrastructure bond issuance on January 18, 2023 at coupon rate of 7.70 per cent. 
• Maruti Suzuki India has commenced exports of its highly successful premium SUV, Grand Vitara. 
• Adani Enterprises has filed an offer letter with stock exchanges for a proposed Rs 20,000 crore follow-on public offer.
• Tata Motors has repositioned Nexon EV portfolio, with changes in pricing and enhanced range.