Thursday turned out to be a choppy day of trade on the Dalal Street, with both Sensex and Nifty closing lower, as the Reserve Bank of India (RBI) and Fed minutes revealed that they are willing to keep increasing the interest rates as inflation remains a concern. After a slightly positive start, markets cut gains and traded volatile during the day, amid foreign fund outflows. Foreign institutional investors (FII) sold shares worth Rs 579.82 crore on February 22, NSE's provisional data showed. Adding more worries among traders, the latest Department for Promotion of Industry and Internal Trade data showed that foreign direct investment (FDI) into India declined by 15 per cent to $36.75 billion during the April-December this fiscal. Despite high volatility, indices managed to keep their heads above water for the most part of the session, as some support came with a report that ahead of the meeting of G20 finance ministers and central bank governors in Bengaluru, the International Monetary Fund (IMF) reiterated that India's strong performance remains a bright spot in an uncertain global economy. But at the end, the day ended in red. There was cautiousness in the markets, as according to the minutes of the meeting, majority of members of the high-powered Monetary Policy Committee (MPC) of the Reserve Bank were concerned about heightened inflation even as two panellists raised objections against an increase in the benchmark interest rate. Finally, the BSE Sensex fell 139.18 points or 0.23% to 59,605.80 and the CNX Nifty was down by 43.05 points or 0.25% to 17,511.25.

The US markets ended higher amid volatile trading on Thursday. The higher close on markets have reflected bargain hunting, with the Dow and the S&P 500 rebounding after ending the previous session at their lowest closing levels in a month. However, buying interest remained somewhat subdued, as interest rate concerns continued to hang over the markets following yesterday's release of the minutes of the latest Federal Reserve meeting. The Fed minutes offered few surprised but reiterated that the central bank will continue to raise interest rates in its battle against inflation. On the sectoral front, semiconductor stocks contributed to the advance, driving the Philadelphia Semiconductor Index up by 3.3 percent. Considerable strength was also visible among oil service stocks, which rebounded along with the price of crude oil. On the economic data front, the Labor Department released a report unexpectedly showing a slight drop in first-time claims for U.S. unemployment benefits in the week ended February 18th. The report said initial jobless claims edged down to 192,000, a decrease of 3,000 from the previous week's revised level of 195,000. The dip surprised participants, who had expected jobless claims to inch up to 200,000 from the 194,000 originally reported for the previous week. Besides, revised data released by the Commerce Department showed the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2022. The report said real gross domestic product jumped by 2.7 percent in the fourth quarter compared to the previously reported 2.9 percent surge. Street had expected GDP growth to be unrevised.

Crude oil futures ended higher on Thursday on expectations of steep cuts to Russian production next month. Further, the notable rebound by the price of crude oil came even though the Energy Information Administration (EIA) released a report showing a much bigger than expected increase in U.S. crude oil inventories. The EIA said crude oil inventories surged by 7.6 million barrels in the week ended February 17 compared to street estimates for an increase of 2.1 million barrels. The report said distillate fuel inventories also jumped by 2.7 million barrels, while gasoline inventories fell by 1.9 million barrels. Benchmark crude oil futures for April delivery gained $1.44 or 2.0 percent to $75.39 a barrel on the New York Mercantile Exchange. Brent crude for April delivery rose $1.61 or 2 percent at $82.21 a barrel on London's Intercontinental Exchange. 

Indian rupee strengthened against the dollar on Thursday, tracking its regional peers and lower crude oil prices. Traders overlooked the Department for Promotion of Industry and Internal Trade's (DPIIT) latest data showing that foreign direct investment (FDI) into India declined by 15 per cent to $36.75 billion during the April-December period of this fiscal year 2022-23 (FY23), as compared to the FDI inflows of $43.17 billion during the corresponding period of the previous year. Meanwhile, the Reserve Bank of India's (RBI) rate setting monetary policy committee (MPC) in its minutes has said though global growth outlook has improved in recent months, it is expected to decelerate during 2023. On the global front, dollar stood near a seven-week high against the euro and the Aussie on Thursday, as expectations the Federal Reserve is likely to stay on its aggressive rate-hike path, reinforced by minutes from its last policy meeting, set the tone for markets. Finally, the rupee ended at 82.73 (Provisional), stronger by 15 paise from its previous close of 82.88 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 6199.47 crore against gross selling of Rs 6261.35 crore, while in the debt segment, the gross purchase was of Rs 791.39 crore against gross selling of Rs 80.07 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.71 crore against gross selling of Rs 29.89 crore.

The US markets ended higher on Thursday as investors grappled with how interest rate policy might affect the US economy. Asian markets are trading mostly in green on Friday as the nominee to lead the Bank of Japan Kazuo Ueda spoke at confirmation hearing. Indian markets buckled under selling pressure for the fifth straight session on Thursday as a bearish trend in Asian markets and concerns over rate hikes by the US Federal Reserve (Fed) unnerved investors. Today, markets are likely to open higher tracing global cues. Traders will be taking encouragement as the monthly economic review for January 2023 released by the finance ministry showed that despite the global economy operating under an extremely challenging macroeconomic environment like the geopolitical tensions in Europe, spiralling energy, food and fertiliser prices, monetary tightening and inflationary trends having elevated the downside risks to the global economic outlook, the Indian economy is estimated to grow by 7 per cent year-on-year in the current fiscal. Traders may take note of External Affairs Minister S Jaishankar's statement that India is 15 per cent of the solution the G20 is looking for in terms of economic growth and development. The minister cited managing director of the International Monetary Fund Kristalina Georgieva's statement that in otherwise a fairly gloomy global economic scenario India's GDP base is growing at seven percent and is likely to increase in the coming decade. However, a rebound in oil prices and concerns over FII outflows may weigh on trading sentiments. Foreign institutional investors (FII) sold shares worth Rs 1,417.24 crore on February 23, the National Stock Exchange's provisional data showed. There may be some cautiousness as the finance ministry raised concerns over the possible impact of El Niño conditions on India this year, saying if recent forecasts came true, the country could see lower agricultural output and higher inflation. There will be some buzz in the sugar stocks with a private report that Fitch Solutions said it sees raw sugar prices averaging 2% higher this year as production will likely disappoint in various regions including Europe and India, while demand in China should recover. Banking stocks will be in focus with another private report that Indian banks could see an increase in bad loans in the retail and small business segments from its recent low levels.

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

Nifty Top volumes

• Tata Steel has acquired 4,68,75,000 equity shares of Rs 10 each at a premium of Rs 54 per share, of Neelachal Ispat Nigam for an amount aggregating to Rs 300 crore. 
• HDFC Bank has collaborated with UAE-based Lulu Exchange to strengthen cross-border payments between India and the Gulf Cooperation Council region. 
• Tata Motors has unveiled its new league of DARK products. 
• Bharti Airtel has created 5G experience zones across all its retail stores in the country.