Indian equity benchmarks remained under selling pressure for the second straight session to end over a half per cent lower on Friday as investors turned cautious after the government hiked securities transaction tax (STT) on futures and options contracts, while lingering concerns of contagion in the global banking sector weighed. After making a cautious start, key gauges soon slipped into red amid foreign fund outflows. Provisional data from exchanges showed that FIIs were net sellers to the tune of Rs 995 crore in the cash markets on March 23.  However, key gauges managed to erase losses and traded marginally higher in afternoon deals, as traders took some support with report stating that India's exports to the UAE are expected to touch an all-time high of $32 billion by the end of this fiscal due to the benefits of free trade agreement between the countries. Some support came after Chief Economic Advisor (CEA) V Anantha Nageswaran indicated that with global crude oil prices on the slide, India's current account deficit (CAD), too, will drop in the current fiscal year (2022-23, or FY23) and the next (2023-24, or FY24), with the external situation being quite stable. However, the recovery was short-lived as equity markets witnessed intense selling pressure in the fag-end of the session amid a bearish trend in Asian and European markets. Besides, shares of asset management companies also fell on Friday after the finance minister announced amendments to the Finance Bill to treat returns on debt mutual funds as short-term capital gain, which is likely to eliminate the long-term tax benefits on such investments. Traders overlooked Union Minister of State for Consumer Affairs, Food and Public Distribution, Ashwini Kumar Choubey's statement that retail food inflation, measured by the Consumer Food Price Index (CFPI) brought out by the Ministry of Statistics and Programme Implementation (MoSPI), has declined from 8.60 percent in September 2022 to 5.95 per cent in February 2023. Finally, the BSE Sensex fell 398.18 points or 0.69% to 57,527.10 and the CNX Nifty was down by 131.85 points or 0.77% to 16,945.05.

The US markets ended higher on Friday as traders felt the banking concerns have been overdone amid optimism the Federal Reserve is nearing the end of its tightening cycle. However, U.S.-listed shares of Deutsche Bank (DB) moved sharply lower in early trading amid a spike by the German lender's credit default swaps. Credit Suisse (CS) and UBS Group (UBS) also came under pressure after a report said they are among banks under scrutiny in a Justice Department probe into whether financial professionals helped Russian oligarchs evade sanctions. On the sectoral front, Interest rate-sensitive utilities and commercial real estate stocks moved sharply higher over the course of the session, driving the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index up by 3.2 percent and 2.6 percent, respectively. A sharp increase by the price of natural gas also contributed to significant strength among natural gas stocks, with the NYSE Arca Natural Gas Index jumping by 1.9 percent. Gold stocks also moved notably higher despite a pullback by the price of the precious metal, resulting in a 2.3 percent gain by the NYSE Arca Gold Bugs Index. On the economic data front, the Commerce Department released a report showing a continued slump in orders for transportation equipment led to an unexpected decrease in new orders for U.S. manufactured durable goods in the month of February. The Commerce Department said durable goods orders slid by 1.0 percent in February after plummeting by a revised 5.0 percent in January. Street had expected durable goods orders to increase by 0.6 percent compared to the 4.5 percent plunge that had been reported for the previous month.

Crude oil futures ended lower on Friday on concerns rising interest rates might hurt growth and result in a drop in energy demand.  Several central banks, including the Federal Reserve and the Bank of England, have raised their interest rates, and indicated more increases in the coming months to fight inflation. Meanwhile, worries about the turmoil in the banking sector linger despite steps taken by governments and central banks. Further, a stronger dollar weighed as well on oil prices. Benchmark crude oil futures for April delivery fell $0.70 or about 1 percent to settle at $69.26 a barrel on the New York Mercantile Exchange. Brent crude for May delivery dropped $0. 95 or about 1.3 percent to settle at $74.96 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Friday weighed down by the strength of the American currency and massive selling in the domestic equity market. Besides, the provisional data from exchanges showed that FIIs were net sellers to the tune of Rs 995 crore in the cash markets on March 23, 2023. Concerns that interest rate hikes by several central banks could slow down economic growth also weighed on the markets. Traders overlooked a report stating that India's exports to the UAE are expected to touch an all-time high of $32 billion by the end of this fiscal due to the benefits of free trade agreement between the countries. On the global front, Russian rouble gave up most of its gains made against the U.S. dollar in the previous session on Friday, as the promise of upcoming month-end tax payments offered limited support amid sharply sliding oil prices. Finally, the rupee ended at 82.44 (Provisional), weaker by 24 paise from its previous close of 82.20 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 7058.89 crore against gross selling of Rs 6672.40 crore, while in the debt segment, the gross purchase was of Rs 798.70 crore against gross selling of Rs 1387.05 crore. Besides, in the hybrid segment, the gross buying was of Rs 20.29 crore against gross selling of Rs 28.35 crore.

The US markets ended higher on Friday as investors shrugged off data showing that durable goods orders unexpectedly fell by 1 percent in February from the month before. Asian markets are trading mostly in red on Monday after the head of the International Monetary Fund warned of increased risks to financial stability. Indian markets ended lower for a second straight session on Friday with weak global cues. Today, markets are likely to start holiday shortened week in green amid mixed cues from global markets. Local markets will remain close on Thursday owing to the Ram Navami holiday. Volatility is likely to persist this week ahead of F&O expiry. Traders will be taking encouragement as Prime Minister Narendra Modi said India will emerge as a developed nation by 2047 with efforts of every single individual. He said the dream will turn into a reality with the hard work of every single individual of the country and the government is encouraging collective efforts. He added that the role of social and religious institutions in this regard is also important. Foreign fund inflows likely to aid domestic sentiments. Foreign investors have pumped Rs 7,200 crore into the Indian equities so far this month, mainly driven by bulk investment in the Adani Group companies by the US-based GQG Partners. Some support will come as the Reserve Bank said India's forex kitty rose by $12.798 billion to $572.801 billion in the week ended March 17. In the previous reporting week, the reserves had dropped by $2.39 billion to a three-month low of $560.003 billion. However, traders may be concerned as optimism about resilience of the banking sector following the Silicon Valley Bank (SVB) and Credit Suisse crisis is likely to be countered by the prospect of higher-for-longer interest rates. There may be some cautiousness with a private report that the Reserve Bank of India may go in for a 25 basis points hike in the bi-monthly monetary policy to be announced on April 6, with retail inflation remaining above the comfort level of 6 per cent and most global peers including US Fed continuing hawkish stance. Meanwhile, after hours of confusion regarding the quantum of STT (securities transaction tax) hike on the sale of options, the Finance Ministry finally clarified that it will be hiked to Rs 6,250 on a turnover of Rs 1 crore. This indicates a 25 percent increase. Earlier, the levy was Rs 5,000. There will be some buzz in the real estate industry stocks with a private report that housing sales in India's top seven cities are estimated to rise 14 per cent during January-March to over 1.13 lakh units on strong demand despite increase in prices by 6-9 per cent. Auto stocks will be in focus as Union road, transport and highway minister Nitin Gadkari said that if India can use recently discovered reserve of lithium in Jammu and Kashmir, it will become number one automobile manufacturing country in the world.

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

Nifty Top volumes

• Tata Steel has acquired the balance 1,35,29,959 equity shares of Rs 10 each, at a premium of Rs 2.81 per share, of Tata Steel Advanced Materials from Tata Steel Downstream Products for an amount aggregating to around Rs 17.33 crore. 
• State Bank of India has completed acquisition of 40% stake in Commercial Indo Bank LLC Moscow from Canara Bank.
• Coal India is eyeing to post 16.6% growth in coal despatch to its non-regulated sector customers in the fourth quarter of the ongoing fiscal (Q4 FY23), compared to the preceding quarter.
• Tata Motors has received an order for providing 1000 XPRES-T EVs to OHM E Logistics in Hyderabad, for their electric cab transportation services.