Indian equity benchmarks trimmed most of the day's gains but managed to settle in the positive territory on Friday. Benchmarks made gap-up opening, as traders took encouragement with a report that the Income-tax department has collected around Rs 28 crore in taxes after about 1 lakh returns were filed by taxpayers under the newly introduced return filing form called ITR-U that was notified this year as part of the Budget 2022-23. Some optimism also came as S&P Global Ratings said that India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness. Buying further crept in as RBI data showed bank credit growth accelerated to 14.2 per cent in the quarter ended June 2022 from 6 per cent in the same period of the previous year. However, key gauges erased gains in the dying hour of trade but managed to close in green, taking support from Services Export Promotion Council (SEPC) said that implementation of the proposed India-UK free trade agreement will help to boost the country's services exports, particularly from legal, accounting and auditing sectors. Adding some more relief, a private report stated that the Indian software-as-a-services (SaaS) market is expected to grow multi-fold by 2025, accounting for almost 7 to 10 per cent of the global market from 2 to 4 per cent currently. Foreign fund inflows into capital markets also supported the markets. According to exchange data, foreign institutional investors (FIIs) bought shares worth Rs 369.06 crore on Thursday. Finally, the BSE Sensex rose 59.15 points or 0.10% to 58,833.87 and the CNX Nifty was up by 36.45 points or 0.21% to 17,558.90.

Falling to their lowest levels in a month, the US markets ended sharply lower on Friday reacting negatively to remarks by Federal Reserve Chair Jerome Powell. In his prepared remarks, Powell acknowledged the central bank's efforts to combat inflation will cause ‘some pain' but argued a failure to restore price stability would mean far greater pain. Powell reiterated the Fed's resolve to bring inflation back to its 2 percent target, declaring that the economy does not work for anyone' without price stability. The Fed chief said the central bank would use its tools forcefully to bring demand and supply into better balance. Powell noted lower inflation readings in July are welcome but said the Fed will need to see more than a single month's improvement before it is confident that inflation is moving down. Ahead of Powell's remarks, the Commerce Department released its report on personal income and spending in the month of July, which included a reading on inflation said to be preferred by the Fed. The report showed the annual rate of core consumer price growth slowed to 4.6 percent in July from 4.8 percent in June. Street had expected the pace of growth to slow to 4.7 percent. Including food and energy prices, the annual rate of consumer price growth slowed to 6.3 percent in July from 6.8 percent in June. The slowdown surprised street, who had expected the pace of growth to accelerate to 7.4 percent.

Recovering from early weakness, crude oil futures settled higher on Friday. Initially oil prices fell after Fed Chair Jerome Powell said he expects to keep rates at higher levels, and that the bank's efforts to combat inflation will cause ‘some pain'. Though, oil prices got support on reports OPEC+ members are supportive of Saudi Arabia's suggestion for market intervention to stabilize world oil markets. Iraq, Algeria, Kuwait, Equatorial Guinea, Venezuela, Libya and Congo all released statements expressing their support after Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said that OPEC might have to curtail production.Benchmark crude oil futures for October delivery rose $0.54 or about 0.6 percent to settle at $93.06 a barrel on the New York Mercantile Exchange. Brent crude for October delivery gained $1.65 or 1.7 percent to settle at $100.99 a barrel on London's Intercontinental Exchange.

Indian rupee ended stronger against dollar on Friday due to fresh selling of the American currency by banks and exporters. Sentiments were upbeat as Services Export Promotion Council (SEPC) said that implementation of the proposed India-UK free trade agreement will help to boost the country's services exports, particularly from legal, accounting and auditing sectors. Traders got some support after the Reserve Bank of India (RBI) in its latest report on ‘the private corporate sector performance' has showed that the manufacturing sector recorded impressive sales growth of 41.6 per cent (y-o-y) in Q1 FY23, aided by both volume and price effects along with broad based demand expansion across industries. On the global front, dollar dipped against other major currencies on Friday, ahead of U.S. Federal Reserve Chair Jerome Powell's widely-anticipated speech at the Jackson Hole symposium. Finally, the rupee ended at 79.84 (Provisional), stronger by 8 paisa from its previous close of 79.92 on Thursday.

The FIIs as per Friday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 9220.18 crore against gross selling of Rs 6859.01 crore, while in the debt segment, the gross purchase was of Rs 435.90 crore against gross selling of Rs 719.65 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.24 crore against gross selling of Rs 7.37 crore.

The US markets ended lower on Friday as Powell's highly anticipated remarks at the Jackson Hole economic symposium were seen as more hawkish than some had hoped. Asian markets are trading in red on Monday as the mounting risk of more aggressive rate hikes in the US and Europe shoved bond yields higher and tested equity and earnings valuations. Indian markets ended off their day's highs on Friday, as oil prices climbed on tight supply. Today, benchmarks are likely to make gap-down opening of holiday shortened week amid sell-off in global markets. Investors will be eyeing the April-June quarter gross domestic product (GDP) data to be out later in the week. Market participants will also be eyeing Reliance Industries' 45th Annual General Meeting (AGM) later in the day. Traders will be concerned as the Reserve Bank of India (RBI) data showed that the country's foreign exchange reserves fell $6.687 billion to $564.053 billion in the week ended August 19. In the previous week ended August 12, the reserves declined $2.238 billion to $570.74 billion. However, some respite may come later in the day as foreign investors have become aggressive shoppers of Indian equities. According to data with depositories, FPIs pumped a net amount of Rs 49,254 crore in Indian equities during August 1-26. This is the highest investment made by them so far in the current year. Some support may also come as Finance Minister Nirmala Sitharaman said financial inclusion is a major step towards inclusive growth which ensures the overall economic development of the marginalised sections of the society. Meanwhile, after banning wheat exports in May, the government on has prohibited exports of wheat flour, maida, semolina and wholemeal aata with a view to curb rising prices. Notifying a decision of the union Cabinet, the Directorate General of Foreign Trade (DGFT), however, said that exports of these items would be allowed subject to permission of the government of India in certain cases. Banking stocks will be in focus as the RBI data showed bank credit grew by 15.32 per cent to Rs 124.305 lakh crore and deposits by 8.84 per cent to Rs 169.49 lakh crore in the fortnight ended August 12. There will be some reaction in infrastructure industry stocks as the Ministry of Statistics and Programme Implementation in its latest report showed that as many as 386 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.7 lakh crore. Credit rating agencies stocks will be in limelight as capital markets regulator Sebi enhanced disclosure rules for credit rating agencies (CRAs) and put in place a framework for rating withdrawal of perpetual debt securities.

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

Nifty Top volumes

• NTPC has received approval from board for investment in Talcher Thermal Power Project, Stage-III (2x660 MW) at an appraised current estimated cost of Rs 11,843.75 crore. 
• Indian Oil Corporation is planning to invest Rs 2 lakh crore to achieve net-zero operational carbon emissions by 2046. 
• Titan Company is eyeing to have around 20-30 stores of its jewellery brand Tanishq in the Gulf and North American markets in the next 2-3 years.
• HDFC Bank has entered into an indicative and non-binding term sheet with Go Digit Life Insurance.