Indian equity benchmarks took a breather after two days of advance and settled in red on Friday dragged down by heavy selling pressure in banking, financial and energy stocks amid mixed cues from global markets. After the initial downtick, markets managed to keep their heads above water as traders took some support with S&P Global Ratings' report stating that India's GDP growth prospects should remain strong over the medium term, with GDP expanding 6-7.1 percent annually in fiscal years 2024-2026. Some support also came with provisional data from the National Stock Exchange showing that foreign institutional investors net bought shares worth Rs 957.25 crore on November 16. However, key gauges witnessed extremely volatile trading trends in late morning deals and traded in a narrow band for most part of the session, as traders got anxious after the Reserve Bank tightened norms for consumer credit as it asked them to assign a higher risk weight for unsecured personal loans, a move aimed at making the lenders more cautious about such advances. Markets added some losses in late afternoon deals, as the Reserve Bank of India (RBI) in its latest monthly bulletin for November 2023 said that the global economy shows signs of slowing down in the final quarter of 2023 as manufacturing languishes while services sector activity appears to have reached the end of its post-pandemic expansion. It also said that going forward, tightening financial conditions is a significant risk to the global outlook. Finally, the BSE Sensex fell 187.75 points or 0.28% to 65,794.73 and the CNX Nifty was down by 33.40 points or 0.17% to 19,731.80.

The US markets ended Friday's choppy session in green terrain with marginal gains as traders seemed to be taking a moment to assess the recent strength in the markets. Optimism about the outlook for interest rates has contributed to the recent advance, as the latest data has shown signs of easing inflation. The data has reinforced investors' expectations that the Federal Reserve will refrain from raising interest rates over the next several months before cutting rates in mid-2024. The Fed's next monetary policy meeting is scheduled for December 12-13, with CME Group's FedWatch Tool currently indicating a 100.0 percent chance the central bank will leave rates unchanged. On the economic data front, the Commerce Department released a report showing an unexpected increase in new residential construction in the month of October. The report said housing starts jumped by 1.9 percent to an annual rate of 1.372 million in October after surging by 3.1 percent to a downwardly revised rate of 1.346 million in September. Street had expected housing starts to dip to a rate of 1.350 million from the 1.358 million originally reported for the previous month. The Commerce Department said building permits also shot up by 1.1 percent to an annual rate of 1.487 million in October after plunging by 4.5 percent to a revised rate of 1.471 million in September.

Crude oil futures ended sharply higher on Friday with gains of around 4%, rebounding from a four-month low hit in the previous session, as investors who had taken short positions took profits. Also, U.S. sanctions on some Russian oil shippers lent support. Meanwhile, a report released by Baker Hughes this afternoon showed the rig count in the U.S. rose by 6 to 500 this week. The focus now is on the OPEC meeting, scheduled to take place on November 26. Traders are waiting to see if Saudi Arabia and Russia will consider rolling over their voluntary supply cuts into 2024. Benchmark crude oil futures for December delivery fell $2.99 or about 4.1 percent to settle at $75.89 a barrel on the New York Mercantile Exchange. Brent crude for January delivery dropped $3.05 or nearly 4 percent to settle at $80.47 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Friday as a firm greenback in the overseas markets and losses in domestic equities weighed on investor sentiment. Investors were worried after the Reserve Bank of India (RBI) has tightened norms for unsecured personal loans for banks and non-banking financial companies (NBFCs). The risk weight on unsecured consumer loans has been raised by 25 percentage points. However, fresh FII inflows and crude oil prices trading near four-month lows helped the rupee restrict losses.  On the global front, Russian rouble steadied near a more than four-month high against the dollar on Friday, supported by exporters' foreign currency purchases and high interest rates, but restrained from growth following a sharp drop in oil prices. Finally, the rupee ended at 83.25 (Provisional), weaker by 2 paise from its previous close of 83.23 on Thursday.

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 13669.23 crore against gross selling of Rs 12343.78 crore, while in the debt segment, the gross purchase was of Rs 2201.91 crore with gross sales of Rs 572.92 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.75 crore against gross selling of Rs 17.95 crore.

The US markets ended higher on Friday optimism about the outlook for interest rates has contributed to the recent advance. Asian markets are trading mixed on Monday after China left its benchmark lending rates unchanged. Indian markets ended Friday's session lower amid a weakness in finance stocks after the Reserve Bank of India (RBI) asked banks to set aside more capital while extending unsecured loans. Today, markets are likely to get cautious start amid mixed Asian cues. Traders will be concerned as the Reserve Bank said India's forex kitty decreased by $462 million to $590.321 billion for the week ended November 10. In the previous reporting week, the overall reserves had increased by $4.672 billion to $590.783 billion. Some cautiousness will come as S&P Global Ratings said the hike in risk weights for consumer loans like personal loan and credit cards may shave-off tier I capital of banks by 60 basis points, hit loan growth, and squeeze the nonbank sector in particular. S&P Global Ratings credit analyst Geeta Chugh said the finance companies will be worse affected as their incremental bank borrowing costs will surge, in addition to the capital adequacy impact. Traders may take note of report that trade Minister Piyush Goyal has said India and the United Kingdom (UK) would be able to resolve the pending issues for a free-trade agreement (FTA) in the coming weeks, as the remaining issues were not insurmountable. However, some respite may come as FPIs bought Indian equities worth Rs 1,433 crore thus far in November, mainly due to the decline in US treasury bond yields and crude oil prices. Foreign Portfolios Investors (FPIs) were net sellers till November 15, after sustained selling in the last two and a half months. Meanwhile, Chief Economic Advisor (CEA) to the Union government V Anantha Nageswaran has said startups will play an important role in helping India become the third largest economy in the world. There will be some buzz in pharma stocks with report that the domestic pharmaceutical industry has the potential to grow by 4-5 times to around $200 billion in value terms by scaling up manufacturing and enhancing exports. Banking stocks will be in focus as the Reserve Bank of India (RBI) permitted banks to open additional current account for exports proceeds in addition to special rupee vostro accounts with a view to provide greater operational flexibility to exporters. There will be some reaction in edible oil industry stocks as oilmeals exports rose 36 per cent last month to nearly 2.9 lakh tonnes on higher shipments of soyabean meal and rapeseed meal. E-commerce industry stocks will be in limelight as Santosh Kumar Sarangi, director general (DG), Directorate General of Foreign Trade (DGFT) said India's e-commerce ecosystem is about to explode in the near future as exports may touch $200 billion during the next six-seven years from the current $1.2 billion.

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

Nifty Top volumes

• State Bank of India is planning to launch its banking mobile app Yono Global in Singapore and the US, offering digitalized remittance and other services to its customers.
• JSW Steel has withdrawn its application for the Final Mine Closure Plan submitted before the Indian Bureau of Mines for the purpose of surrender of Jajang Iron Ore Block located in the district of Keonjhar, Odisha, after considering demand and supply scenario of Iron Ore in India.
• UPL has opened its Global NPP Research Center in Ramos Arizpe, Mexico.   
• Bharti Airtel has extended 5G coverage to all 24 districts of Punjab.