Indian equity benchmarks ended lower for the second day in a row on Friday amid losses in index major Hindustan Unilever, Asian Paints and Bajaj Finance. Markets made a cautious start and hovered around neutral lines with negative bias as investors remained on sidelines and refrained from taking any long positions. However, markets soon turned positive and traded marginally in green in morning deals, as traders took some support with the Reserve Bank of India's (RBI) January 2023 Bulletin stating 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. Some support also came as provisional data available on the NSE showed that foreign institutional investors (FII) bought shares worth Rs 399.98 crore on January 19, 2023. However, buying proved short-lived as indices once again moved in the negative zone in afternoon deals, as traders got anxious amid a private report stating that VC investment in India is expected to remain soft in the first quarter of 2023, before starting to pick up in Q2 -- in part due to India's strong growth and consumption expectations. Investors also remained on sidelines ahead of the upcoming Union Budget for 2023-24, slated to be presented on February 1. Traders also took a 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. Finally, the BSE Sensex fell 236.66 points or 0.39% to 60,621.77 and the CNX Nifty was down by 80.20 points or 0.44% to 18,027.65.

Regaining ground after posting steep losses for two straight days, the US markets ended sharply higher on Friday with strong gains in Nasdaq led by rally in Tech stocks. The strength on Wall Street came as traders looked to pick up stocks at relatively reduced levels following recent weakness, which reflected ongoing concerns about the outlook for the economy and interest rates. The rally by tech stocks partly reflected a positive reaction to quarterly results from streaming giant Netflix (NFLX). Netflix soared after the company reported fourth quarter earnings that missed analyst estimates but stronger than expected subscriber growth. On the economic data front, the National Association of Realtors (NAR) released a report showing a continued decline in U.S. existing home sales in the month of December, although the decrease was much smaller than market participants had expected. NAR said existing home sales slumped by 1.5 percent to an annual rate of 4.02 million in December after plunging by 7.9 percent to a revised rate of 4.08 million in November. Street had expected existing home sales to tumble by 3.4 percent to an annual rate of 3.95 million from the 4.09 million originally reported for the previous month.

Crude oil futures settled higher on Friday on optimism over Chinese crude demand as the country lifts its COVID-19 restrictions. According to the data released by the Joint Organizations Data Initiative, Chinese oil demand climbed by nearly 1 million barrels per day from the previous month to 15.41 million barrels per day in November 2022, the highest level since February, 2022. The dollar's drop from the day's highs also supported to the rise in oil prices. Benchmark crude oil futures for February delivery rose 98 cents or 1.2 percent at $81.31 a barrel on the New York Mercantile Exchange. Brent crude for March delivery gained $1.47 or 1.7 percent at $87.63 a barrel on London's Intercontinental Exchange.

Indian rupee settled higher against dollar on last trading day of week despite weak domestic equities. Traders took some support with the Reserve Bank of India's (RBI) January 2023 Bulletin stating 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. Besides, foreign institutional investors (FII) bought shares worth Rs 399.98 crore on January 19, 2023. On the global front,  dollar hovered around seven-month lows on Friday as a slew of data feeds concern among investors that an economic slowdown could be unavoidable, while a bout of profit-taking forced the yen to retreat. Finally, the rupee ended at 81.18 (Provisional), stronger by 18 paise from its previous close of 81.36 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 7791.57 crore against gross selling of Rs 7203.67 crore, while in the debt segment, the gross purchase was of Rs 516.60 crore against gross selling of Rs 145.96 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.97 crore against gross selling of Rs 4.49 crore.

The US markets ended higher on Friday as streaming giant Netflix reported stronger than expected subscriber growth. Asian markets are trading in green on Monday with markets in mainland China, Hong Kong, Singapore and Seoul closed for Lunar New Year celebrations. Indian markets closed lower for the second day in a row on Friday due to a decline in index major Reliance Industries, Hindustan Unilever, and Infosys amid concerns over global economic slowdown. Today, start of holiday shortened session on optimistic note on firm trade in other Asian counterparts and the impending F&O expiry scheduled for Wednesday. Sentiments will get boost as retail inflation for farm and rural workers sequentially eased to 6.38 per cent and 6.6 per cent, respectively, in December 2022, mainly due to lower prices of certain food items. Traders will be getting encouragement as India's forex reserves zoomed by $10.417 billion to $572 billion as on January 13, making it one of the biggest weekly jumps in the kitty in recent times. In the previous reporting week, the overall reserves had dropped by $1.268 billion to $561.583 billion. Meanwhile, in a relief to exporters from hotel, healthcare, and educational sectors, the government has announced a one-time relaxation for them with respect to maintaining the average export obligation under the Export Promotion Capital Goods (EPCG) scheme. However, there may be some cautiousness as the latest payroll data released showed fresh formal job creation remained below one million for the second consecutive month in November, signalling pressure in the employment market. Traders may be concerned as foreign investors pulled out a net amount of Rs 15,236 crore this month so far on attractive Chinese markets and concerns about the US economy entering a recession. Banking stocks will be in focus as credit rating agency Fitch said the benefits of Indian banks' switching to the International Financial Reporting Standards (IFRS) accounting rules will outweigh any short-term impact on capital levels and is unlikely to drive rating changes. There will be lots of earnings reaction to keep the markets buzzing.

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

Nifty Top volumes

• Sun Pharmaceutical Industries has inked a pact to acquire US-based Concert Pharmaceuticals in a $576 million (around Rs 4,688 crore) deal. 
• M&M has received approval from Maharashtra government to set up a Rs 10,000-crore electric vehicle plant in Pune under the state's industrial promotion scheme for Electric Vehicles. 
• Adani Enterprises is planning to enter the water segment as this is a key element of its core business of infrastructure. 
• Bharti Airtel has launched its cutting edge 5G services in Puri in addition to Bhubaneswar, Cuttack and Rourkela launched in early January.