Indian equity benchmarks traded volatile and settled marginally in the green on the day of monthly expiry of May month contracts. Markets made a cautious start, as rating agency Crisil in its research report said higher input prices and disruptions to the rural economy have resulted in price pressures and inflation is back to haunt us. The report by Crisil said it sees upside risks to its 5 per cent estimate on consumer price inflation in FY21 because of this. Besides, India recorded over 211,000 new Covid infections, while deaths from the disease rose by 3,842. The country's total cases now stand at 27.36 million. However, benchmarks moved higher in noon deal as traders took some support with private report that the government may at the beginning of the unlock phase announce another stimulus package for the most hit sectors such as small business and self-employed, with the world's worst pandemic outbreak scarring nascent economic recovery. However, key indices erased all the gains to turn negative in late afternoon session, as traders got anxious with Reserve Bank of India's statement that the second wave of COVID-19 pandemic has triggered revision of growth projections for the current financial year with consensus gravitating towards its earlier forecast of 10.5 per cent. Reserve Bank's projection 10.5 per cent for the year 2021-22 -- 26.2 per cent in Q1, 8.3 per cent in Q2, 5.4 per cent in Q3 and 6.2 per cent in Q4. But, markets managed to end session in green terrain, taking support from report that amid the second wave of COVID-19 pandemic, CII President Uday Kotak has strongly recommended the government to consider another fiscal package to support the lower end of the society as well as small and medium businesses. Traders took a note of report that the shortfall in GST compensation payable to states in the current fiscal is estimated at Rs 2.69 lakh crore, of which Rs 1.58 lakh crore would have to be borrowed this year. The Centre expects to collect over Rs 1.11 lakh crore through cess on luxury, demerit and sin goods which will be given to the states to compensate them for the shortfall in revenue arising out of GST implementation. Finally, the BSE Sensex rose 97.70 points or 0.19% to 51,115.22, while the CNX Nifty was up by 36.40 points or 0.24% to 15,337.85.

The US markets ended mostly higher on Thursday as investors cheered stronger-than-expected labor-market data. A report released by the Labor Department showed first-time claims for US unemployment benefits fell by more than expected in the week ended May 22nd. The Labor Department said initial jobless claims slid to 406,000, a decrease of 38,000 from the previous week's unrevised level of 444,000. Street had expected jobless claims to dip to 425,000. Jobless claims decreased for the fourth consecutive week, once again falling to their lowest level since hitting 256,000 in the week ended March 14, 2020. The report showed the less volatile four-week moving average also fell to its lowest level in over a year, dropping to 458,750 from the previous week's unrevised average of 504,750. However, the lackluster performance on the day came as traders continued to look ahead to a highly anticipated reaching on inflation due out Friday. The inflation reading is said to be preferred by the Federal Reserve and could have a significant impact on the outlook for monetary policy. Meanwhile, a separate report from the Commerce Department showed an unexpected pullback in durable goods orders in April, although the decrease was largely due to a steep drop in orders for transportation equipment. The report showed durable goods orders tumbled by 1.3 percent in April after jumping by an upwardly revised 1.3 percent in March. The pullback surprised participants, who had expected durable goods orders to climb by 0.7 percent compared to the 0.8 percent increase that had been reported for the previous month.

Crude oil futures ended higher for 5th Straight Session on Thursday bolstered by strong US economic data that offset investors' concerns about the potential for a rise in Iranian supplies. Data released by the Labor Department said initial jobless claims in the US slid to 406,000 in the week ended May 22nd, a decrease of 38,000 from the previous week's unrevised level of 444,000. Street had expected jobless claims to dip to 425,000. Iran and world powers are in talks in Vienna, discussing reviving the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action. According to recent reports, the latest round of talks was constructive and the parties made meaningful progress. Meanwhile, the Organization of the Petroleum Exporting Countries and its allies are scheduled to meet next Wednesday (June 1), to discuss energy market conditions and the cartel's production policy. Crude oil futures for July surged $0.64 or 1 to settle at $66.85 barrel on the New York Mercantile Exchange. July Brent crude rose $0.43 or 0.63 percent to settle at 69.16 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly higher against dollar on persistent selling of the American currency by exporters. This was the second consecutive session when the rupee was traded higher against dollar. Sentiments perked up as Prime Minister Narendra Modi and French President Emmanuel Macron discussed the positive outcomes of the recently concluded India-EU Leaders' Meeting. India and the European Union (EU) had on May 8 announced their decision to resume negotiations for a balanced and comprehensive trade agreement after a gap of eight years and unveiled an ambitious connectivity partnership. On the global front, sterling recovered from an overnight drop against the dollar that took it to a 10-day low on Thursday, as the greenback's spike higher fizzled out by the start of European trading. Finally, the rupee ended 72.60, stronger by 17 paise from its previous close of 72.77 on Tuesday.

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 12548.11 crore against gross selling of Rs 11053.23 crore, while in the debt segment, the gross purchase was of Rs 577.55 crore with gross sales of Rs 875.22 crore. Besides, in the hybrid segment, the gross buying was of Rs 33.23 crore against gross selling of Rs 50.96 crore.

The US markets ended mostly higher on Thursday as data showing improvement in the labor market helped bolster expectations in the economic recovery and spurred a minor rotation towards stocks seen as more likely to benefit from the rebound. Asian markets are trading mostly in green on Friday as investors bet the US will lead the world out of the COVID-19 pandemic, with the focus turning to a multi-trillion dollar spending boost by the Biden administration. Indian markets ended higher with Nifty at record closing high boosted by banks and IT stocks, as rise in Asian peers. Today, the markets are likely to get positive start tracking global peers coupled with decline in covid cases in the country. India recorded 179,770 fresh Covid-19 cases in the last 24 hours, the lowest daily count in 44 days, as infections continued to decrease in the country. Investors will be eyeing the goods and services tax (GST) Council meet today after a span of seven months. There are reports that some opposition ruled states could pitch for an extension of the GST compensation regime for five more years beyond 2022. Sources say that the Council is expected to discuss the compensation shortfall, which is estimated at Rs 1.6 lakh crore for the current fiscal, and is likely to be funded by borrowings this year as well. Some support will come with a private report that the government is hopeful of a speedy launch of single-dose COVID-19 vaccine Sputnik Light in India and all stakeholders, including the Russian manufacturer and its Indian partners, have been directed to fast-track the application and regulatory approval procedures for the jab to boost the country's vaccination drive. Besides, the government said India is witnessing a downswing in the second wave of COVID-19 and hopefully it will be sustained even when restrictions are gently, systematically and cautiously relaxed. Though, there may be some cautiousness as the central bank, in its annual report, issued caution over the meteoric rise in stock prices at a time when the country's gross domestic product (GDP) has contracted. Meanwhile, Foreign Institutional Investors (FII) turned net sellers on Thursday, pulling out Rs 660 crore from domestic markets. Domestic Institutional Investors (DII) were net buyers, pumping in Rs 112 crore into domestic equities. Banking stocks will be in focus as Reserve Bank of India (RBI) asked banks to closely monitor their bad loans and prepare themselves for higher provisioning in the wake of second COVID wave and the Supreme Court order lifting the ban on classification of non-performing assets. Also, RBI data showed financial frauds reported by banks decreased by 15 percent in numbers and by 25 percent in total value terms compared to the previous financial year. There will be some reaction in realty sector stocks as ratings agency Crisil said although the market is growing in 2021-22, a full recovery in the residential realty sector is expected only in 2024. According to it, the country's housing market is expected to grow by 5-10 per cent in the current fiscal year.

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

Nifty Top volumes

• TCS has partnered with LACChain, an initiative led by IDB Lab, to drive the development of a blockchain ecosystem across Latin America and the Caribbean. 
• BPCL has declared a record Rs 12,581 crore dividend, more than half of which will go to the government, ahead of the privatisation of the company. 
• Power Grid Corporation of India has continued its COVID-19 care initiatives, including treatment help to its employees and their family members, amid the pandemic. 
• Maruti Suzuki India is planning to install two oxygen generation plants in the twin capitals of Jammu and Kashmir under its corporate social responsibility.