Indian equity benchmarks traded under pressure throughout the day and lost over half a percent on Friday as Capital Goods, Realty and Power shares took a hit amid concerns over potential rate hikes and weak trend in global markets. Markets made a gap-down opening and remained in range bound till the end, as domestic sentiments remained pessimistic with the Reserve Bank of India (RBI) in its minutes of the recent monetary policy committee (MPC) meeting stating that the headline inflation is likely to witness a spike in the near months on account of supply disruptions due to adverse weather conditions. It said there are risks from the impact of the skewed south-west monsoon so far, a possible El Nino event and upward pressures on global food prices due to geopolitical hostilities. Adding more concerns among traders, a new report by the Asian Development Bank (ADB) showed that the increased cost-of-living crisis sparked by surging inflation last year, combined with the lingering effects of the COVID-19 pandemic, is continuing to push people in Asia and the Pacific into extreme poverty. Traders overlooked Finance Secretary T V Somanathan's statement that India will continue to clock the highest growth rate among the top five economies in the world in the foreseeable future and asked Indian diaspora to act as a catalyst and supplement government efforts in making India the biggest opportunity. Traders also paid no heed towards Commerce and Industry Minister Piyush Goyal's statement that the ongoing negotiations between India and the UK on a free trade agreement (FTA) are progressing extremely well and it is expected to conclude at an early date.  Finally, the BSE Sensex fell 365.83 points or 0.56% to 64,886.51 and the CNX Nifty was down by 120.90 points or 0.62% to 19,265.80.

The US markets ended higher on Friday as investors reacted positively to Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole Symposium. Fed Chair Powell reiterated the central bank's target of 2 percent inflation, and called it challenging to know when monetary policy is restrictive enough to know in real time when such a stance has been achieved. Powell claimed there are some challenges that are common to all tightening cycles. For example, real interest rates are now positive and well above mainstream estimates of the neutral policy rate.  He said ‘We see the current stance of policy as restrictive, putting downward pressure on economic activity, hiring, and inflation. But we cannot identify with certainty the neutral rate of interest, and thus there is always uncertainty about the precise level of monetary policy restraint. In the stock specific developments, boeing climbed nearly 3 percent. Intel gained about 2.1 percent and Salesforce.com advanced nearly 2 percent. Visa, Nike, Caterpillar, Apple, IBM, Walt Disney and Microsoft gained 1 to 1.3 percent. Cisco Systems, Johnson & Johnson, McDonalds, Merck and P&G also closed notably higher. Shares of Workday Inc. rallied 5.4 percent after the company reported second-quarter earnings of $78.66 million, as against a loss of $64.16 million in the second quarter of the previous financial year.

Crude oil futures ended higher on Friday amid tightening supply due to production cuts from OPEC and its major allies. Russia and Saudi Arabia announced earlier this month that they would extend their additional cuts into September. It is widely expected that Saudi Arabia will likely continue with its production cut through October. Higher diesel prices in the U.S., and reports about a fire at a refinery in Louisiana contributed as well to the uptick in oil prices.  Benchmark crude oil futures for October delivery gained $0.78 or about 1 percent to settle at $79.83 a barrel on the New York Mercantile Exchange. Brent crude for October delivery rose $1.12 or 1.3 percent to settle at $84.48 a barrel on London's Intercontinental Exchange.

Indian rupee weakened against the US dollar on Friday tracking strong American currency and negative equity markets. Rising crude oil prices also dampened investors' sentiments. Traders were worried, as the Reserve Bank of India (RBI) in its minutes of the recent monetary policy committee (MPC) meeting said that the headline inflation is likely to witness a spike in the near months on account of supply disruptions due to adverse weather conditions. It said there are risks from the impact of the skewed south-west monsoon so far, a possible El Nino event and upward pressures on global food prices due to geopolitical hostilities. On the global front, the British pound dropped lower on Friday as investors rein in expectations of where they think the Bank of England's interest rate might peak after recent soft activity data. Finally, the rupee ended at 82.64 (Provisional), weaker by 8 paise from its previous close of 82.56 on Thursday.

The FIIs as per Friday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 13076.21 crore against gross selling of Rs 10870.42 crore, while in the debt segment, the gross purchase was of Rs 588.48 crore with gross sales of Rs 833.26 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.19 crore against gross selling of Rs 7.25 crore.

The US markets ended higher on Friday as investors reacted positively to Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole Symposium. The Asian markets are trading higher in early deals on Monday following positive cues from US markets.  Indian equity markets ended lower on Friday ahead of US Fed Chair Jerome Powell's speech at the Jackson Hole Symposium later in the day. Today, markets are likely to make positive start on firm cues from global markets. Sentiment may get some support as Commerce and Industry Minister Piyush Goyal and US Trade Representative Katherine Tai discussed ways to promote trade and investments between the two countries. Goyal said discussed key bilateral issues of mutual interest and explored ways to give further impetus to the growing India-US partnership through enhanced trade and investments. Traders may take note of report that G20 India Sherpa Amitabh Kant said a push for growth with free trade, concerted action on climate change and financing, accelerating the pace of outcomes of sustainable development goals (SDGs), digital transformation, and women-led development, are the key priorities for India's G20 Presidency. However, there may be some cautiousness in the markets as government data said that foreign direct investment (FDI) into India declined 34 per cent to $10.94 billion during April-June 2023-24, dragged by lower inflows in computer hardware and software, telecom, auto and pharma. FDI inflows stood at $16.58 billion during April-June 2022-23. Inflows during January-March 2023 too had contracted 40.55 per cent to $9.28 billion. There may be some buzz in electric vehicles industry related stocks as private report said that the finance ministry is considering the proposal for including the electric vehicles infrastructure under the priority sector lending category. The move will promote and accelerate the penetration of EVs in the country and attract investments in the sector. Also, there may be some buzz in NBFC industry related stocks as the Reserve Bank of India (RBI) has directed non-banking finance companies (NBFCs), including housing finance companies (HFCs), to limit the increase in reliance on bank borrowing and has issued a caution regarding the risks associated with the growth of unsecured retail loans. Reliance Industries will be in focus, as the company will hold its annual general meeting (AGM) with the shareholders on August 28.

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

Nifty Top volumes

•  Reliance Industries has entered into an understanding with The Oberoi Hotels and Resorts to jointly manage three properties across India and the UK.
•  HDFC Bank has signed a memorandum of understanding with StartupTN to promote innovation and entrepreneurship in Tamil Nadu.
•  Bharti Airtel has added 14.09 lakh customers in June 2023.
•  Tata Motors is reportedly planning to launch a high-voltage electric car in the market.