Indian equity benchmarks settled lower for fourth straight session on Friday led by losses in auto, metal and banking stocks. Weakness in global markets also weighed on investor sentiment. Markets made negative start and stayed in red for most part of the day, as traders were concerned with report that India registered 12,643 fresh Covid-19 cases of the coronavirus disease (Covid-19). Active cases in India stand at 137,866, while the caseload tally has risen to 10,962,189. The country continues to be second-most-affected globally, and ranks 17th among worst-hit nations by active cases. Traders took a note of Finance Minister Nirmala Sitharaman's statement that India's inflation target band of 2-6 per cent is up for review as the five-year term for the Monetary Policy Committee's (MPC's) inflation-targeting framework draws to a close. Key gauges extended their losses in late afternoon session, as trades got anxious with report that PE/VC investments in January 2021 reported a 35 per cent drop to $1.6 billion from $2.5 billion, a year ago. The number of deals reported also remained flat at 80. Sentiments remained down-beat amid union ministries of health and civil aviation released new guidelines for arriving international passengers due to the increased transmissibility of Brazil, South Africa, and UK variants of COVID-19. As per the new rules, all passengers traveling to India must get an RT-PCR test conducted within 72 hours of their flight departure time and the negative report has to be uploaded before boarding. Traders overlooked report that foreign portfolio investors (FPIs) have pumped in a whopping $33.8 billion into domestic equities and debt till February 15 this fiscal year -- the highest since FY15 when it was nearly $46 billion -- taking their net outstanding investments to a record $592.5 billion. Finally, the BSE Sensex fell 434.93 points or 0.85% to 50,889.76, while the CNX Nifty was down by 137.20 points or 0.91% to 14,981.75.

The US markets ended mostly higher on Friday amid continued optimism about more fiscal stimulus, as new Treasury Secretary Janet Yellen urged lawmakers to approve President Joe Biden's $1.9 trillion relief package. As per a report, Yellen suggested that the Biden administration's proposal could help the US get back to full employment within a year. Democrats have been hoping to pass a new stimulus bill with Republican support but may be forced to use the process known as reconciliation to approve a relief package without GOP votes. However, gains remained limited amid a jump in treasury yields, with the yield on the benchmark ten-year note reading its highest closing level in almost a year. The recent increase in treasury yields has raised concerns about the outlook for interest rates amid worries about the prospects of higher inflation. On the economic data front, the National Association of Realtors (NAR) released a report showing another unexpected increase in US existing home sales in the month of January. NAR said existing home sales rose by 0.6 percent to an annual rate of 6.69 million in January after climbing by 0.9 percent to a revised rate of 6.65 million in December. Compared to the same month a year ago, existing home sales in January were up by 23.7 percent. The continued growth came as surprise to market participants, who had expected existing home sales to tumble by 2.2 percent to a rate of 6.61 million from the 6.76 million originally reported for the previous month.

Crude oil futures ended considerably lower on Friday on expectations that crude output shut down by winter storms in Texas will soon be restored. Oil companies in Texas had shut down production earlier this week due to extreme cold conditions. Expectations that major oil producers making up the OPEC+ group will decide as early as next month to loosen production curbs, as well as early signs of a thaw in US-Iran relations were also a weighted  down on oil prices. Meanwhile, Baker Hughes on Friday reported that the number of active US rigs drilling for oil edged down by 1 to 305 this week, implying a slight slowdown in output to come. That was the first weekly decline since November. Crude oil futures for March fell $1.28 or 2.1 percent to settle at $59.24 barrel on the New York Mercantile Exchange. April Brent crude declined $59.24 or 1.6 percent to settle at $62.91 a barrel on London's Intercontinental Exchange.

Indian Money market remained closed on Friday on account of Chhatrapati Shivaji Maharaj Jayanti.

The FIIs as per Thursday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 8586.86 crore against gross selling of Rs 7396.35 crore, while in the debt segment, the gross purchase was of Rs 450.81 crore with gross sales of Rs 1411.12 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.38 crore against gross selling of Rs 42.13 crore.

The US markets ended mostly higher on Friday as investors hoped a disappointing January jobs report would increase the likelihood of further stimulus. Asian markets are trading mostly in green on Monday as expectations for faster economic growth and inflation globally batter bonds and boost commodities, though rising real yields also make equity valuations look more stretched in comparison. Indian markets ended lower for the fourth straight session on Friday amid broad-based selling seen across all sectors. Losses in banking, auto and metal stocks dragged the markets the most. Today, the start of new week is likely to be flat-to-positive note tracking gains in Asian peers. Some support will come with report that retail inflation for farm workers and rural labourers eased to 2.17 per cent and 3.25 per cent in January, mainly due to lower prices of certain food items. Besides, continuing their buying spree, foreign portfolio investors (FPIs) invested Rs 24,965 crore in Indian markets in February so far as various organisations predicted high economic growth for the country and the Union Budget boosted investors' sentiment. Meanwhile, investors will be eyeing the macroeconomic data that is GDP print for the December quarter that is slated to be out on Friday, February 26, post-market hours. There are expectations that third-quarter GDP data to show signs of recovery. However, rising Covid cases to remain a concern. India reported 14,264 new Covid-19 cases with Maharashtra as the worst hit, following which the government there banned political, religious and social gatherings and imposed a new lockdown in some areas. There may be some cautiousness as Maharashtra Chief Minister Uddhav Thackeray said that a strict lockdown could be implemented in the state and Mumbai if people don't follow discipline. Thackeray said that imposing a lockdown is necessary to cut the chain of the COVID-19 infection and added that districts have been told to impose restrictions as required from February 22. Aviation stocks will be in focus as Minister of State for Civil Aviation Minister Hardeep Singh Puri said that with domestic air traffic expected to increase further in the coming summer season, the government may remove the fare band besides lifting other restrictions. There will be some reaction in fertiliser industry stocks as India Ratings and Research (Ind-Ra) said the credit metrics of fertiliser manufacturers in general and urea manufacturers in particular are likely to improve meaningfully in FY22 due to strong likelihood of clearance of subsidy backlogs after allocation of an additional Rs 62,600 crore fertiliser subsidy in the revised estimate of FY21. Infrastructure stocks will be in limelight with report that as many as 448 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.02 lakh crore.

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

Nifty Top volumes

• L&T has supplied 100 units of indigenously made K-9 Vajra-T 155 mm/ 52 calibre self-propelled guns to the Indian army. 
• HDFC Bank has released Parivartan Impact Report for the state of Madhya Pradesh. 
• Dr. Reddy's Laboratories has initiated the process with the DCGI for Emergency Use Authorization of the well-studied human adenoviral vector-based platform vaccine candidate, Sputnik V. 
• Bharti Airtel has added 40,51,750 customers in December 2020.