Indian equity benchmarks trimmed most of their initial losses but ended marginally lower on Friday, dragged by TECK, IT and Banking stocks.  After making a cautious start, key indices drifted lower during the first half as the provisional data available on the NSE showed that foreign institutional investors (FII) sold shares worth net Rs 3,979.44 crore on July 27. Sentiments remained down-beat amid a private report stating that the changing inflation dynamics mean that the RBI (Reserve Bank of India) will likely raise its 2023-24 inflation forecast at the August 10 policy meeting, where it expects a hawkish hold. Selling further crept in as another reports stated that vegetable prices in India are set to stay higher for longer, as erratic monsoon rains delayed planting and damaged ripening crops. Vegetables prices, which have a 6% weighting in the overall consumer price index (CPI), hit a seven-month high in June, rising 12% month-on-month. However, markets witnessed a sharp recovery towards the end which helped to close off the intraday lows, as traders found some solace with 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 (about Rs 81,993 crore) of incentives and assistance provided to encourage local chip manufacturing. Some support also came with private report stating that India is likely to grow 6-6.3 per cent in the current fiscal year ending March 31, 2024. It also forecasted growth surpassing 7 per cent over the next two years if global uncertainties recede. Traders also took a 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. Finally, the BSE Sensex fell 106.62 points or 0.16% to 66,160.20 and the CNX Nifty was down by 13.85 points or 0.07% to 19,646.05.

The US markets ended higher with notable gains on Friday taking cues from encouraging earnings updates from top tech firms. Intel climbed more than 6.5 percent, continuing to benefit from upbeat second-quarter earnings. Meta Platforms gained about 4.5 percent, riding on strong quarterly earnings. Microsoft surged 2.3 percent, Apple advanced 1.35 percent, and Verizon gained 1.5 percent. Some optimism also came in with data showing a slowdown in the annual rate of growth in consumer prices in the month of June. Easing worries about interest rates following the Federal Reserve hinting at a pause in hikes as early as September also aided the sentiments in markets. Data from the Commerce Department showed personal income rose by 0.3 percent in June after climbing by an upwardly revised 0.5 percent in May. Street had expected personal income to increase by 0.5 percent compared to the 0.4 percent advance originally reported for the previous month. Meanwhile, personal spending climbed by 0.5 percent in June after inching up by an upwardly revised 0.2 percent in May. Street had expected personal spending to rise by 0.4 percent compared to the 0.1 percent uptick originally reported for the previous month. The data showed the annual rate of growth by consumer prices slowed to 3.0 percent in June from 3.8 percent in May. Street had expected the pace of growth to slow to 3.1 percent. The annual rate of growth by core consumer prices, which exclude food and energy prices, also slowed to 4.1 percent from 4.6 percent.

Magnifying previous session's gains, crude oil futures settled in green on Friday amid easing U.S. recession fears, and on optimism over increased demand for oil in the U.S. and China. Demand worries have eased after a slew of U.S. economic data released on Thursday pointed to a resilient economy. Data showing the U.S. economy grew more than expected in the second quarter, has helped quell fears of an imminent recession. Some support also came in amid warnings of tight supply due to production cuts by OPEC and its allies. Meanwhile, China stimulus hopes spurred expectations of oil demand regeneration from the world's largest importer of crude oil. Benchmark crude oil futures for September delivery rose $0.49 or about 0.6 percent to settle at $80.58 a barrel on the New York Mercantile Exchange. Brent crude for September delivery surged $0.75 or about 0.9 percent to settle at $84.99 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Friday amid renewed foreign fund outflows and negative trends in domestic equity markets. Traders were worried amid a private report stating that the changing inflation dynamics mean that the RBI (Reserve Bank of India) will likely raise its 2023-24 inflation forecast at the August 10 policy meeting, where it expects a hawkish hold. Besides, another reports stated that vegetable prices in India are set to stay higher for longer, as erratic monsoon rains delayed planting and damaged ripening crops. On the global front, the pound edged higher on Friday but hovered near two-week lows after a string of central bank decisions this week reinforced expectations that the Bank of England will not deliver another jumbo rate hike next week. Finally, the rupee ended at 82.24 (Provisional), weaker by 32 paise from its previous close of 81.92 on Thursday.

The FIIs as per Friday'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 14765.88 crore against gross selling of Rs 16015.70 crore, while in the debt segment, the gross purchase was of Rs 685.63 crore with gross sales of Rs 426.88 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.66 crore against gross selling of Rs 15.46 crore.

The US markets ended higher on Friday after a slew of Big Tech earnings, economic data and central bank announcements boosted investor confidence in a soft landing for the U.S. economy. Asian markets are trading in green on Monday following a higher close on Wall Street. Indian markets ended lower on Friday amid selling seen in the information technology, banking and oil & gas names. Today, domestic indices are likely to start session on a positive note amid moves across global markets. Some support will come with report that foreign portfolio investors (FPIs) continue with their buying spree in July with a net infusion of Rs 45,365 crore in Indian equity markets on stable macroeconomic fundamentals and steady earnings growth. Traders will be taking encouragement with Finance minister Nirmala Sitharaman's statement that the government is focusing on four I's - infrastructure, investment, innovation and inclusivity to put in place an enabling ecosystem that will catapult India into the league of developed nations by 2047. Some optimism will come with a private report that the country's per capita income is likely to grow by close to 70 per cent to $4,000 by fiscal 2030 from $2,450 in fiscal 2023, helping it become a middle-income economy with $6-trillion GDP, more than half of which will be coming in from household consumption. Traders may take note of Commerce and Industry Minister Piyush Goyal's statement that he is hopeful of India finalising certain free trade agreements (FTAs) in the next few months, which would help promote exports. However, there may be some cautiousness as Reserve Bank of India's data showed India's foreign exchange reserves saw a dip of $1.9 billion, dragging the reserves to $607.03 for the week ending on July 21. Previously, forex reserves had risen by $12.74 billion, the biggest jump in four months for the week ending on July 14. Tea industry stocks will be in focus as Tea Board provisional data showed that tea production during the month of June this year has dropped to 137.85 million kilogrammes as compared to 143.12 million kilogrammes in the same month of 2022. There will be some reaction in semiconductor industry's stocks as Rajeev Chandrasekhar, minister of state for electronics and IT said that the government will expand the design-linked incentive (DLI) scheme for semiconductor companies to include larger companies - both foreign and Indian, as suggested by the industry stakeholders. Besides, the April-June quarter (Q1FY24) results will hog limelight. On July 31, companies like Maruti Suzuki, Adani Green Energy, Oberoi Realty, among others will report Q1FY24 scorecard.

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

Nifty Top volumes

• Tata Steel has acquired 1,40,51,522 equity shares of face value Rs 10 each, at a premium of Rs 2.81 per share of Tata Steel Advanced for an amount aggregating to around Rs 17.99 crore. 
• Adani Enterprises' arm -- Adani New Industries has raised $394 million (Rs 3,231 crore) from Barclays PLC and Deutsche Bank AG. 
• Nestle India is planning to invest Rs 4,200 crore by 2025, including in its 10th plant in the country at Odisha. 
• ITC has incorporated a wholly owned subsidiary in the name of ITC Hotels.