In a highly volatile session, Indian equity benchmarks buckled under selling pressure for the second straight session on Friday as weakness in global markets continues to keep investors on the edge. The markets started on a negative note and remained in red terrain for most part of the session, as traders were concerned with the Reserve Bank of India's monthly bulletin stating that 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. Besides, fresh foreign fund outflows also hit investors' sentiments. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,510.86 crore on Thursday after a day's breather, according to exchange data. However, benchmark indices regained some lost ground in the fag-end of the session as traders took support with Reserve Bank of India's article stating that investment activity is gaining momentum and the envisaged capital expenditure is set to jump by over 80 per cent to Rs 1.71 lakh crore in the current fiscal (FY24). It also said improvement in capacity utilisation of the manufacturing sector, pick-up in credit demand and improving consumer sentiments are helping the capex cycle. Traders took a note of report that corporate India's deal activity witnessed a 58 per cent jump in value terms to $3.1 billion in July, largely driven by big-ticket transactions, while caution in the private equity world led to a reduction in overall volumes. This surge in deal value was anchored by 29 deals valued at $2 billion, where six high-value transactions encompassing traditional sectors like IT, auto, retail, and manufacturing took the centre stage. But, key gauges failed to hold recovery and ended the session in red, as some pessimism remained among traders with private report stating that private equity and venture capital funds' investments in the country declined 5 per cent to $3.9 billion across 59 deals in July 2023. Finally, the BSE Sensex fell 202.36 points or 0.31% to 64,948.66 and the CNX Nifty was down by 55.10 points or 0.28% to 19,310.15.

The US markets ended mostly in red on Friday as investors remained on sidelines amid concerns the Federal Reserve will hold interest rates higher for longer to control inflation. Minutes this week from the Federal Reserve rate-setting July meeting showed most members of the rate-setting committee continued to see significant upside risks to inflation, suggesting more hikes are in the pipeline. Now, attention turns to the Fed and other top central banks' annual gathering in Jackson Hole, Wyoming. Investors remained on sideline ahead of a speech from Fed Chair Jerome Powell next Friday for clues about the interest rate outlook. Though, downside somewhat remained capped as the dollar and Treasury yields fell slightly from recent highs. In stocks specific movements, Wallgreens Boots Alliance and 3M declined 2.2 percent and 1.7 percent, respectively. Alphabet ended 1.9 percent down, and Meta Platforms declined 0.65 percent, while Apple ended modestly higher. Johnson & Johnson, Goldman Sachs, 3M, Amgen, Travelers Companies, Microsoft, Nike and Caterpillar posted modest losses. Discount store Ross Stores shares rallied 5 percent after the company raised its annual sales and profit forecasts. Walmart climbed nearly 1.5 percent, rebounding from recent losses. Boeing, Chevron, Coca-Cola, Cisco Systems and IBM gained 0.5 to 1 percent.

Magnifying gains from the previous session, crude oil futures ended higher on Friday after data indicated a drop in output. Data from Baker Hughes showed the oil and natural gas rigs count in the U.S. dropped for a sixth week in a row, indicating a slump in future output. The data showed the total number of active drilling rigs in the U.S. fell by 12 this week to 652. So far this year, Baker Hughes has estimated a loss of 136 active drilling rigs. The number of oil rigs fell by 5 this week to 520, down by 101 so far in 2023. The number of gas rigs fell by 6 to 117. A weak dollar contributed as well to the uptick in oil prices. Benchmark crude oil futures for September delivery rose $0.86 or about 1.1 percent to settle at $81.25 a barrel on the New York Mercantile Exchange. Brent crude for October delivery gained $0.63 or 0.75 percent to settle at $84.75 a barrel on London's Intercontinental Exchange.

Indian rupee ended lower on Friday weighed down by a negative trend in domestic equities and foreign fund outflows. Traders were concerned after 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. Besides, a private report stated that private equity and venture capital funds' investments in the country declined 5 per cent to $3.9 billion across 59 deals in July 2023. On the global front, the pound softened on Friday as gloomy market sentiment sent investors to the safe haven of the U.S. dollar, and British retailers reported a bigger-than-expected drop in sales in July. Finally, the rupee ended at 83.10 (Provisional), weaker by 1 paisa from its previous close of 83.09 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 11654.68 crore against gross selling of Rs 12641.65 crore, while in the debt segment, the gross purchase was of Rs 1091.46 crore with gross sales of Rs 917.26 crore. Besides, in the hybrid segment, the gross buying was of Rs 731.91 crore against gross selling of Rs 12.66 crore.

The US markets ended mostly lower on Friday as gains in defensive sectors and energy offset weakness in megacap growth stocks, while investors looked toward next week's speech by Federal Reserve Chair Jerome Powell. Asian markets are trading mixed on Monday after China's central bank cut its one-year loan prime rate to 3.45 per cent but left its five-year rate unchanged, disappointing investors. Indian markets traded under selling pressure and ended in red for the second straight session on Friday as investors offloaded IT, teck and metal stocks amid a bearish global trend. Today, markets are likely to start new week on cautious note tracking mixed cues from global peers. Foreign fund outflows likely to dent domestic sentiments, as foreign institutional investors (FII) sold shares worth net Rs 266.98 crore on August 18. There will be some cautiousness as retail inflation for farm and rural workers inched up to 7.43 per cent and 7.26 per cent in July compared to 6.31 per cent and 6.16 per cent, respectively, in June this year, mainly due to higher prices of certain food items. However, traders may be taking encouragement as Moody's affirmed India's sovereign rating at Baa3 with a stable outlook and said high growth will support a gradual increase in income levels, which will further contribute to economic strength. Moody's said it expects India's economic growth to outpace all other G20 economies through at least the next two years, driven by domestic demand. Some support may come as latest data by the Reserve Bank of India showed India's foreign exchange reserves snapped a three-week losing streak and increased by $708 million to $602 billion in the week ended August 11. The rise in the reserves was mainly on account of an increase in the foreign currency assets, which grew by $999 million to $534 billion in the previous week. Traders may take note of Finance Secretary T V Somanathan's statement that the government will stick to the fiscal deficit target of 5.9 per cent of the GDP as robust tax, non-tax collections will help meet the spending requirement and make up for any shortfall in disinvestment proceeds. Besides, a private report indicated that corporate India's deal activity witnessed a 58 per cent jump in value terms to $3.1 billion in July, largely driven by big-ticket transactions, while caution in the private equity world led to a reduction in overall volumes. There will be some buzz in private hospitals stocks as ICRA Ratings in a report said that corporate hospitals are set to clock an 8-10 per cent revenue growth and strong margins in the current fiscal. Meanwhile, Jio Financial Services, the demerged financial services entity of Reliance Industries, will be listed on the exchanges today.

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

Nifty Top volumes

• NTPC has executed a Business Transfer Agreement with NTPC Mining for hiving-off its coal mining business, consisting of 6 coal mines. 
• State Bank of India has offered to extend relief on loans to its customers in Manipur, who have been affected by the ongoing unrest in the state. 
• ONGC is investing Rs 1 lakh crore by the end of this decade in low-carbon energy opportunities, including renewables and green hydrogen as it looks to transform into a low-carbon energy player. 
• HCL Technologies and Pearson VUE have entered into a strategic partnership to set up advanced test centers in India developed for the highly sought after Pearson Test of English Academic.