Indian equity benchmarks ended lower on Thursday due to selling in TECK, IT and Telecom stocks. Traders also awaited India's interim budget due next week. After making a cautious start, markets extended losses as provisional data from the NSE showed Foreign institutional investors (FIIs) maintained selling pressure in the cash segment for six days in a row, offloading shares worth Rs 6,934.93 crore on January 24. Traders took a note of Economic Research Department of the State Bank of India's (SBI) report stating that the fiscal deficit for the fiscal year 2024-25 is anticipated to be set close to 5.5 per cent of the Gross Domestic Product (GDP). However, markets cut some of their losses in late afternoon deals, as traders took some support with rating agency Icra's report that it revised upward its bank credit growth projection at 14.9-15.3 per cent this fiscal, but said the same will lose steam and grow at 12 per cent next fiscal. It said at 14.9-15.3 per cent, the system level credit expansion in absolute terms will be Rs 20.4-20.9 trillion. It stated this will be the highest ever incremental bank credit growth and would surpass the previous high of Rs 18.2 trillion recorded in FY23 at a growth rate of 15.4 per cent. Some support also came with India Meteorological Department's (IMD) statement that it expects the persisting El Nino conditions to turn neutral prior to the start of monsoon season in June. Neutral El Nino conditions imply that it would not have an adverse impact on the monsoon rains next season. But, markets failed to erase all the losses and ended lower as some concern remained among traders with private report stating that investments by private equity and venture capital funds declined for the second consecutive year in 2023 after the funding winter impacted 2022. Finally, Nifty and Sensex settled below the psychological 21,400 and 70,800 levels, respectively. Finally, the BSE Sensex fell 359.64 points or 0.51% to 70,700.67 and the CNX Nifty was down by 101.35 points or 0.47% to 21,352.60.

The US markets ended mixed on Friday as traders weighed disappointing earnings news from semiconductor giant Intel (INTC) against tamer than expected consumer price inflation data. The Commerce Department released a report showing a bigger than expected slowdown in the annual rate of core consumer price growth in the month of December. The report said the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.9 percent in December from 3.2 percent in November. Traders remained reluctant to make significant moves ahead of the Fed's monetary policy announcement next week. While the Fed is widely expected to leave interest rates unchanged, traders will be looking for clues about the timing of highly anticipated rate cuts. Meanwhile, Semiconductor stocks fell amid the steep drop by Intel, however, with the Philadelphia Semiconductor Index plunging by 2.9 percent. Further, airline stocks also plunged on the day, while some strength was visible among oil producer and steel stocks.

Crude oil futures closed higher on Friday amid optimism about the outlook for oil demand thanks to some upbeat U.S. economic data and the Chinese central bank's fresh stimulus to spur growth. The data from the Commerce Department showed that U.S. gross domestic product (GDP) shot up by 3.3% in the fourth quarter after surging by 4.9% in the third quarter, while the street had expected GDP to jump by 2%. Concerns about supply disruptions in the Middle East due to ongoing unrest in the region also contributed to the uptick in oil prices. Benchmark crude oil futures for March delivery rose $0.65 or 0.84% to settle at $78.01 a barrel on the New York Mercantile Exchange. Brent crude for March delivery rose $1.12 to $83.55 per barrel on London's Intercontinental Exchange.  

Indian rupee appreciated marginally against the US dollar on Thursday as the support from weak American currency overseas was negated by rising crude oil prices. Investors got support after CareEdge Ratings' report stating that the Indian Rupee is expected to appreciate to around 82 against the Dollar in the calendar year 2024 on the back of a softening dollar, robust Foreign Portfolio Investment (FPI) inflows, and a comfortable current account deficit. Meanwhile, India Meteorological Department's (IMD) statement that it expects the persisting El Nino conditions to turn neutral prior to the start of monsoon season in June. Neutral El Nino conditions imply that it would not have an adverse impact on the monsoon rains next season. On the global front, the dollar was broadly steady on Thursday, as investors await GDP and other data this week to gauge where U.S. rates are headed, while the euro was soft ahead of the European Central Bank's policy meeting later in the day. Finally, the rupee ended at 83.11 (Provisional), stronger by 1 paisa from its previous close of 83.12 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 21835.57 crore against gross selling of Rs 27261.97 crore, while in the debt segment, the gross purchase was of Rs 1496.59 crore with gross sales of Rs 1357.47 crore. Besides, in the hybrid segment, the gross buying was of Rs 26.68 crore against gross selling of Rs 24.71 crore.

The US markets ended mostly in red on Friday amid a spike in inflation numbers. Asian markets are trading mostly higher on Monday ahead of a slew of GDP and inflation numbers due out from the region this week. Indian markets ended lower with cut of around half a percent on Thursday, amid profit booking in large and mid-cap stocks, and monthly F&O expiry of the January derivatives series. Today, markets are likely to make gap-up opening following a long weekend. Investor focus this week remains on the US Fed's rate outcome on January 31 and the interim budget back home on February 1. Traders may take note of renowned economist and former RBI governor Raghuram Rajan's statement that India needs to focus more on education and healthcare to become a developed economy by 2047. Meanwhile, capital markets regulator Sebi has extended the deadline for implementation of rules related to mandatory confirmation or denial of market rumours by the top 100 listed companies. The deadline has been extended for the top 100 listed companies by market capitalisation to June 1 from February 1 this year at present. However, some cautiousness may come with a private report that foreign portfolio investors have been aggressively selling Indian stocks, turning net sellers in the Indian equity market so far in January 2024, after making a beeline to accumulate domestic stocks during the past two months--November and December. The latest data available from the National Securities Depository Limited (NSDL) showed that the FPIs sold Indian stocks worth Rs 24,734 crore in January. Some pessimism may come as a Crisil Ratings report said that the ongoing crisis around the Red Sea in the Middle East is expected to impact players operating in sectors such as agricultural commodities and marine foods due to the perishable nature of their goods and/or lean margin profiles, which limit their ability to absorb the risks from rising freight cost. Besides, latest data by Reserve Bank of India (RBI) showed that India's foreign exchange reserves saw a dip of $2.79 billion to $616.14 billion for the week ending on January 19. There will be some reaction in infrastructure industry related stocks with report that as many as 431 infrastructure projects, each entailing an investment of Rs 150 crore or more, were hit by cost overrun of more than Rs 4.82 lakh crore in December 2023. According to the Ministry of Statistics and Programme Implementation (MoSPI), which monitors infrastructure projects worth Rs 150 crore and above, out of 1,820 projects, 431 reported cost overrun and 848 projects were delayed. Defence stocks will be in focus as Union minister Ajay Bhatt said India is becoming self-reliant in defence production, and for the first time, leading the top 25 countries in defence exports. Investors continue to keep close eye on earnings of many companies for more directional cues.

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

Nifty Top volumes

• Axis Bank has received an approval for investment of an amount of up to Rs 100 crore (in one or more tranches) in a new wholly owned subsidiary company of the Bank.
• Coal India has received an approval from the government for setting-up of two coal gasification plants in West Bengal and Odisha.
• HCL Technologies has entered into strategic partnership with Amity University Online, India's first university entitled to offer online degree programs.
• Tata Motors has revolutionized the CNG segment in the country by introducing AMT in its CNG cars - a first in the industry.