Indian equity indices buckled under heavy selling pressure and shed over half a percent on Thursday, even as most global markets advanced following an expected 25 bps rate hike by US Fed. The weakness was also due to the July F&O series expiry.  Markets made a positive start as the provisional data available on the NSE showed that foreign institutional investors (FII) bought shares worth net Rs 922.84 crore on July 26. Some optimism also came with a private report stating that private sector banks reported a robust 37.0 per cent year-on-year (YOY) growth in net profit to Rs 37,683 crore in the first quarter ended June 2023 on healthy growth in net interest income (NII) and strong credit offtake. Traders took note of Prime Minister (PM) Narendra Modi's statement that India would be among the top three economies in the world in his third term. However, markets surrendered all their gains and slipped into red in late morning deals, as traders turned cautious amid a private report stating that with the world facing growing economic instability and political tensions, volatility in geo-economics and geopolitical relations between major economies is likely to result in global upheavals over the next six months. Investors also remained on sidelines ahead of the Goods and Services Tax Council meeting to be held on August 02. The agenda is expected to include a final decision on the proposed 28 per cent GST on online gaming, casinos and horse racing. Traders overlooked Union minister Rajeev Chandrasekhar's statement that India is on track to becoming a key player in the global semiconductor supply chain in the next decade with $10 billion of incentives and assistance provided to encourage local chip manufacturing. Finally, the BSE Sensex fell 440.38 points or 0.66% to 66,266.82 and the CNX Nifty was down by 118.40 points or 0.60% to 19,659.90.

The US markets ended lower on Thursday as investors cashed in following recent gains. However, the early strength on markets partly reflected a positive reaction to upbeat earnings news, with Facebook parent Meta Platforms (META) leading the rally by the Nasdaq. Shares of Meta pulled back off their best levels but still surged by 4.4 percent after the company better than expected second quarter results and provided upbeat guidance. Fast food giant McDonald's (MCD) also jumped by 1.2 percent after reporting second quarter results that beat analyst estimates on both the top and bottom lines. On the sectoral front, Gold stocks moved sharply lower over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 4.1 percent. The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for August delivery tumbling $24.40 to $1,945.70 an ounce. On the economic data front, U.S. economic growth unexpectedly accelerated in the second quarter of 2023, the Commerce Department revealed in a preliminary report released. The report said real gross domestic product surged by 2.4 percent in the second quarter after jumping by 2.0 percent in the first quarter. Street had expected the pace of GDP growth to slow to 1.8 percent. The Commerce Department said the unexpected acceleration in GDP growth primarily reflected an upturn in private inventory investment and an acceleration in nonresidential fixed investment. The positive contributions were partly offset by a downturn in exports and decelerations in consumer spending, federal government spending, and state and local government spending.

Crude oil futures ended higher on Thursday on upbeat U.S. economic data. Data released by the Commerce Department showed an unexpected acceleration in the pace of economic growth in the second quarter. The report said, real gross domestic product surged by 2.4% in the second quarter after jumping by 2% in the first quarter. Street had expected the pace of GDP growth to slow to 1.8%. Besides, prospects of tighter supply in the market due to production cuts by OPEC and allies contributed as well to the rise in oil prices. Benchmark crude oil futures for September delivery rose $1.31 or about 1.7 percent to settle at $80.09 a barrel on the New York Mercantile Exchange. Brent crude for September delivery surged $1.32 or about 1.6 percent to settle at $84.24 a barrel on London's Intercontinental Exchange.

Indian rupee appreciated against the dollar on Thursday tracking the weakness of the American currency in the overseas market after the US Fed raised interest rates on expected lines. Traders took some support with a private report stating that private sector banks reported a robust 37.0 per cent year-on-year (YOY) growth in net profit to Rs 37,683 crore in the first quarter ended June 2023 on healthy growth in net interest income (NII) and strong credit offtake. On the global front, sterling rose against a weakening dollar on Thursday after the U.S. central bank raised the cost of borrowing again, while it fell against a strengthening euro ahead of the outcome of the European Central Bank's (ECB) latest meeting. Finally, the rupee ended at 81.94 (Provisional), stronger by 7 paise from its previous close of 82.01 on Wednesday.

The FIIs as per Thursday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 8751.46 crore against gross selling of Rs 7620.50 crore, while in the debt segment, the gross purchase was of Rs 596.55 crore with gross sales of Rs 574.89 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.73 crore against gross selling of Rs 17.13 crore.

The US markets ended lower on Thursday ahead of personal consumption expenditures price index, an inflation gauge closely tracked by the Federal Reserve. Asian markets are trading mixed on Friday tracking overnight losses on Wall Street. Indian markets witnessed significant volatility on Thursday and ended with over half a percent cut after the US Federal Reserve hiked interest rates in-line with the markets' expectations by 25 bps. Today, markets are likely to get cautious start tracking lackluster trade in global markets. Foreign fund outflows likely to dent domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 3,979.44 crore on July 27. However, some support may come as a report by industry body PHDCCI showed that the trade between India and the US is likely to touch $300 billion in 2026-27 from $188 billion in 2022-23, with about 60 per cent rise in value. Traders may take note of Commerce and industry minister Piyush Goyal's statement that India has asked Japan and South Korea to renegotiate the comprehensive economic partnership agreement (CEPA) to make the trade more balanced and equitable. Besides, the Reserve Bank of India's (RBI) digital payments index (DPI) rose to 395.57 in March 2023 as against 377.46 for September 2022, the central bank said. The index was at 349.30 in March 2022. Banking stocks will be in limelight the finance ministry said comprehensive measures taken by the government and Reserve Bank of india (RBI) to recover and reduce NPAs, including those pertaining to corporate companies, have enabled an aggregate recovery of Rs 10.16 trillion by Scheduled Commercial Banks (SCBs) during the last nine financial years ending 2022-23. There will be some reaction in chemicals industry stocks as Finance Minister Nirmala Sitharaman said the government is considering a separate production linked incentive (PLI) scheme for chemicals and petrochemicals. She added global manufacturers are interested in India where the sector is linked to 80,000 products. Gems and jewellery sector stocks will be in focus with report that revenue growth in the gems and jewellery industry is expected to slow down this fiscal year, with export demand falling for the second consecutive year due to a slowdown in key markets even as domestic demand remains positive. Meanwhile, the April-June (Q1FY24) quarterly results will be in focus. On July 28, companies like Indian Oil Corporation, SBI Cards, Marico, Supreme Industries, United Breweries, Bank of India, Piramal Enterprises are some of the prominent names to report Q1FY24 results.

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

Nifty Top volumes

• Cipla's associate company -- GoApptiv has incorporated wholly-owned subsidiary company namely Pactiv Healthcare with effective from July 26, 2023. 
• Mahindra & Mahindra has acquired a 3.53% stake in RBL Bank as an investment at a cost of Rs 417 crore. 
• HCL Technologies has expanded its collaboration with Microsoft to provide high-performance computing solutions for clients in various industries.
• NTPC is all set to commence commercial operation of second unit of 660 MW capacity of Barh Super Thermal Power Station, Stage-I (3x660 MW) with effect from August 1, 2023.