Indian equity benchmarks erased early losses and closed with gains on the F&O expiry day, led by the Oil & Gas, Metal and Energy stocks. Both benchmarks opened in the red and traded lower for most part of the trading session amid weak global cues. Sentiments remained downbeat with a private report stating that after three consecutive years of infusing huge funds, foreign portfolio investors retreated from the Indian equity markets in a big way in 2022 with the highest-ever yearly net outflow of nearly Rs 1.21 lakh crore. Some pessimism also came with RBI Monetary Policy Committee (MPC) Member Ashima Goyal's statement that the government should not go in for an 'aggressive fiscal consolidation' in the upcoming budget as global risks have not abated. However, last hour buying erased all the intraday losses to help the bourses close on a positive note. Traders found solace with Crisil's report stating that strong domestic demand, healthier corporate balance sheets, and a well-capitalised banking sector are expected to steer India towards a 7 per cent gross domestic product (GDP) print in 2022-23. Traders got some support with report stated that free trade agreement (FTA) between India and Australia, which comes into effect from December 29, 2022, will help boost bilateral trade in goods and services to cross $70 billion in the next five years. Adding to the optimism, various export promotion councils (EPCs) lauded the trade agreements signed by India with the UAE and Australia, saying the pacts will help the country in boosting exports by granting preferential access to those markets for Indian products. Finally, the BSE Sensex rose 223.60 points or 0.37% to 61,133.88 and the CNX Nifty was up by 68.50 points or 0.38% to 18,191.00.

The US markets ended higher on Thursday with Nasdaq settling over one and half percent. The rally on markets partly reflected bargain hunting, particularly among tech stocks, which moved sharply lower over the two preceding sessions. The standout gain by the Nasdaq came after the tech-heavy index ended Wednesday's trading at its lowest closing level in over two years. On the sectoral front, semiconductor stocks showed a substantial rebound on the day, with the Philadelphia Semiconductor Index spiking by 3.3 percent after ending Wednesday's trading at its lowest closing level in well over a month. Software, networking and computer hardware stocks also saw strength, contributing to the surge by the tech-heavy Nasdaq. Oil service, biotechnology and housing stocks also showed strong moves to the upside, moving higher along with most of the other major sectors. On the economic data front, first-time claims for U.S. unemployment benefits rose by slightly more than expected in the week ended December 24th, according to a report released by the Labor Department. The report said initial jobless claims crept up to 225,000, an increase of 9,000 from the previous week's unrevised level of 216,000. Street had expected jobless claims to inch up to 222,000. Meanwhile, the Labor Department said the less volatile four-week moving average edged down to 221,000, a decrease of 250 from the previous week's revised average of 221,250. The report also said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also climbed by 41,000 to 1.710 million in the week ended December 17th.

Crude oil futures ended lower on Thursday, extended their previous session's losses, as data showed an increase in US crude inventories in the week ended December 23rd. Data released by US Energy Information Administration (EIA) showed crude inventories in the US rose by 718,000 barrels last week compared with forecasts for a drop of 1.5 million barrels. The EIA data also showed gasoline stockpiles fell by 3.1 million barrels last week versus expectations for a drop of 2.3 million barrels. Besides, sentiments were weak on concerns about a surge in Covid-19 cases in China. With Covid-19 cases rising in China, concerns about a global recession have risen, raising the possibility of a drop in energy demand. Benchmark crude oil futures for February delivery fell $1.13 or 0.7 percent at $78.40 a barrel on the New York Mercantile Exchange. Brent crude for February dropped $1 or 1.20 percent to settle at $82.26 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against dollar on Thursday despite late recovery in domestic markets. Sentiments got hit with RBI Monetary Policy Committee (MPC) Member Ashima Goyal's statement that the government should not go in for an 'aggressive fiscal consolidation' in the upcoming budget as global risks have not abated. Traders overlooked Crisil's report stating that strong domestic demand, healthier corporate balance sheets, and a well-capitalised banking sector are expected to steer India towards a 7 per cent gross domestic product (GDP) print in 2022-23. On the global front, Russian rouble pared losses to gain on Thursday after slumping to an eight-month low against the dollar in early trade, struggling under the weight of expectations that sanctions on Russian oil and gas may limit export revenues. Finally, the rupee ended at 82.82 (Provisional), weaker by 2 paise from its previous close of 82.80 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 4288.72 crore against gross selling of Rs 4716.45 crore, while in the debt segment, the gross purchase was of Rs 1402.97 crore against gross selling of Rs 201.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.71 crore against gross selling of Rs 13.79 crore.

The US markets ended higher on Thursday as investors sought to snap up bargains in the tech sector, looking past worries that new variants could emerge from China's continuing COVID outbreak. Asian markets are trading in green on Friday following overnight gains on Wall Street. Indian markets closed in the positive territory after trading lower for most part of the session on Thursday on fag-end buying in telecom, banking and metal stocks. Today, benchmark indices are likely to make a positive start on the last trading day of the calendar year (2022) tracking strength across global markets. Sentiments will get a boost as Reserve Bank of India (RBI) Governor Shaktikanta Das said the Indian economy is resilient with financial stability maintained with a well-capitalised banking sector, amid global uncertainties and shocks. Some support will come as Union Commerce Minister Piyush Goyal said he expects at least two more free trade agreements to be signed up in 2023. He also said negotiations are scheduled with the UK, European Union and Canada. However, traders may be concerned as data released by the Reserve Bank showed that the country's current account deficit widened to 4.4 per cent of the GDP in the quarter ended September, from 2.2 per cent GDP during the April-June period, due to higher trade gap. There may be some cautiousness as the finance ministry said India's external debt stood at $610.5 billion in the second quarter of 2022-23, down by $2.3 billion from end-June 2022. The external debt to GDP ratio stood at 19.2 per cent as at end-September 2022 as compared to 19.3 per cent at end-June. There will be some buzz in banking stocks as the RBI said banks' gross NPA ratio has fallen to a sever-year low of 5 per cent and the banking system remains sound and well-capitalised. In the 26th issue of the Financial Stability Report (FSR), the RBI also said the global economy is facing formidable headwinds with recessionary risks looming large. Real estate industry stocks will be in focus as CRISIL expects primary residential sales to post modest volume growth of 3-8 per cent on-year in 2022-23 (FY23) on a high base of the previous year for the top eight cities. It added that the increase in primary residential sales will be despite a reversal in the purchasing power of homebuyers. There will be some reaction in textile industry stocks as the Confederation of Indian Textiles Industry said the India-Australia Economic Cooperation and Trade Agreement, which came into force from December 29, is set to provide a big relief to Indian textile exporters. Meanwhile, shares of Elin Electronics will debut on the bourses today.

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

Nifty Top volumes

• State Bank of India is planning to raise infrastructure bonds up to an amount of Rs 10,000 crore through a public issue or private placement, during FY23. 
• Bharti Airtel is planning to invest Rs 27,000-28,000 crore in telecom network with a focus on 5G rollout.
• NTPC is all set to commence Commercial Operation of second part capacity of 50 MW out of 300 MW Nokhra Solar PV Project at Bikaner, Rajasthan with effect from December 30, 2022.  
• Bajaj Finserv's subsidiary -- Bajaj Markets has recorded a disbursement of Rs 402 crore in November 2022, delivering a 34% year-on-year growth.