Indian equity benchmarks ended the weekly expiry session in the red with a loss of about a percent amid a selloff in global markets. The Sensex fell as much as 485 point and Nifty 50 index briefly tumbled below its important psychological level of 15,750.  After making cautious start, key indices witnessed selling pressure throughout the day, as rising coronavirus cases weighted down on market sentiments. India recorded a spike of 45,196 new infections, taking the total caseload to 30,708,092, according to Worldometer. Some concern also came as Fitch Ratings in its latest report said that it has cut India's growth forecast to 10 per cent for the current financial year (FY22), from 12.8 per cent estimated earlier, due to slowing recovery post-second wave of COVID-19. It said the challenges for the banking sector posed by the coronavirus pandemic have increased due to a virulent second wave in the first quarter of the financial year ending March 2022 (FY22). Indian bourses extended their losses in second half of the session, as investors were concerned with private report stating that the India's retail inflation likely to accelerate to seven-month high in June on rising food and fuel prices, staying above the Reserve Bank of India's comfort zone for a second straight month. While many of India's states have eased restrictions imposed to contain the coronavirus, supply-side disruptions remain and higher taxes on petroleum products continue to exert upward pressure on inflation. Sentiments remained pessimistic after Fitch Ratings in its latest report said localized lockdowns during the second wave kept economic activity from stalling to levels similar to those during 2020, but disruption in several key business centers has slowed the recovery and dented its expectations of a rebound to pre-pandemic levels by FY22. Meanwhile, Commerce and Industry Minister Piyush Goyal has called for a services trade agreement among friendly nations of the Indo-Pacific region as it can help liberalise domestic regulations and build capacity in sectors like e-commerce and IT. He also said India's trade with select Indo-Pacific economies increased to $262 billion in 2020 from $33 billion in 2001. However, he said, non-tariff measures act as major trade barriers in the region. Finally, the BSE Sensex fell 485.82 points or 0.92% to 52,568.94, while the CNX Nifty was down by 151.75 points or 0.96% to 15,727.90.

The US markets ended lower on Thursday on concerns about the global economic comeback from Covid-19. The US economy has recovered strongly from the pandemic-induced slump, but the rapid spread of variants in other parts of the world has raised concerns about a global slowdown. The losses also came as Japan declared a state of emergency in Tokyo for the upcoming Olympics and as countries deal with a rebound in cases due to Covid variants. Adding to the negative sentiment on Markets, the Labor Department released a report showing initial jobless claims unexpectedly inched higher in the week ended July 3rd. The Labor Department said initial jobless claims crept up to 373,000, an increase of 2,000 from the previous week's revised level of 371,000.  The uptick surprised participants, who had expected jobless claims to drop to 350,000 from the 364,000 originally reported for the previous week. Besides, the weakness on Wall Street also came amid a continued slump in US treasury yields, with the yield on the benchmark ten-year note once again falling to its lowest levels since February. On the sectoral front, transportation stocks moved sharply lower on the day, dragging the Dow Jones Transportation Average down by 3.3 percent to its lowest closing level in well over three months. Significant weakness was also visible among gold stocks, as reflected by the 2.8 percent slump by the NYSE Arca Gold Bugs Index. The weakness among gold stocks came amid a downturn by the price of the precious metal, with gold for August delivery slipping $1.90 to $1,800.20 an ounce after reaching a high of $1,819.50 an ounce. Housing stocks also saw considerable weakness on the day, resulting in a 2.7 percent drop by the Philadelphia Housing Sector Index.

Crude oil futures ended higher on Thursday after data showed a bigger than expected decline in crude inventories in the US last week. Data released by US Energy Information Administration (EIA) showed crude inventories in the country fell by 6.866 million barrels last week, far more than the expected drop of about 4.03 million barrels. The data also showed distillate stockpiles increased by 1.616 million barrels last week, much more than expected increase of 171,000 barrels, while gasoline inventories dropped by over 6 million barrels in the week, nearly three times the expected decline. A report released by the American Petroleum Institute (API) on Wednesday showed crude inventories in the US fell by 8.0 million barrels last week. Crude oil futures for August rose $0.74 or about 1 percent to settle at $72.94 barrel on the New York Mercantile Exchange. September Brent crude gained $0.76 or 1.03 percent to settle at $74.19 a barrel on London's Intercontinental Exchange.

Continuing previous session's losses, Indian rupee ended weaker against the US dollar on Thursday, on increased demand for the greenback from importers and banks. Besides, losses in the local equity market also dampened sentiments. Traders were worried US Fed has hinted that it will begin to taper its asset purchases programme as soon as this year. This seems to have roiled the sentiment in emerging markets as the dollar traded near its highest in three months versus major peers. Sentiments were also fragile as Fitch Ratings decreased India's GDP outlook for FY22 to 10 percent from 12.8 percent earlier, citing a sluggish recovery following the second wave of COVID-19 as a reason. On the global front; sterling eased against both the dollar and the euro on Thursday, trading within recent ranges as it pointed to falling volatility levels. Finally, the rupee ended 74.71, weaker by 9 paise from its previous close of 74.62 on Wednesday.

The FIIs as per Thursday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 6063.53 crore against gross selling of Rs 5402.43 crore, while in the debt segment, the gross purchase was of Rs 540.74 crore with gross sales of Rs 323.25 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.78 crore against gross selling of Rs 8.62 crore.

The US markets ended in red on Thursday amid sell-off driven by uncertainties surrounding the pace of the US economic recovery. Asian markets are trading mostly lower on Friday on growing anxiety that the spread of Covid-19 variants could hamper the global economic recovery. Indian markets ended lower with cut of around a percent each on Thursday dragged by selling across the board. Today, Indian benchmark indices are likely to open on a weak note mirroring sluggish trend in global markets coupled with lack of any major domestic trigger. Investors may react to the Q1 performance by IT bellwether Tata Consultancy Services (TCS), which was below Street expectations. There will be some cautiousness with a private report that Southwest monsoon has practically stalled over most parts of the country since June 19. This has not only delayed its progress over north India but has also badly impacted the sowing of the kharif crop. However, some respite may come later in the day as India recorded a sharp decline in new infections. The country reported 34,443 fresh cases taking the total caseload to 30,708,092, according to Worldometer. Some optimism may come as Prime Minister Narendra Modi said the government has taken important decisions for the welfare of agriculture and farmers, noted that a Rs 23,000 crore package has also been approved to strengthen the fight against the COVID-19 pandemic. Some support may come with a private report that hiring activity in the country, which was hit by the second COVID wave, bounced back with a 15 per cent growth in June compared to May. The activity was led by the IT-Software/Software Services sector. Traders may take note of report that the finance ministry on Thursday said it has released the fourth monthly installment of post devolution revenue deficit grant of Rs 9,871 crore to 17 states. With the release of this installment, a total amount of Rs 39,484 crore has been released to eligible states in current financial year. There will be some buzz in the auto stocks as India's overall vehicle retail sales rose in both sequential and on year-on-year basis in June 2021. Accordingly, the data released by the Federation of Automobile Dealers Associations (FADA) showed a rise of 22.26 per cent during the month under review from the level of June 2020. Banking stocks will be in focus as the Reserve Bank asked banks and financial institutions to use any widely accepted alternative reference rate (AAR) instead of LIBOR (London Interbank Offered Rates) as the reference rate for entering into new financial contracts. There will be some reaction in power industry stocks with report that power demand in the country touched an all-time high and crossed the 200 GW mark amid many states witnessing high temperatures due to delayed monsoon, and easing of coronavirus-related restrictions.

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

Nifty Top volumes

• HDFC has divested 32,53,517 shares representing 2.46 percent of the paid-up share capital of Hindustan Oil Exploration Company. 
• Titan Company has reported an over two-fold jump in sales in Q1FY22, helped by the low base of last year due to the nationwide lockdown at the onset of the COVID-19 pandemic. 
• Tata Motors' Group global wholesales in Q1 FY22, including Jaguar Land Rover, were at 2,14,250 nos., higher by 134%, as compared to Q1 FY21. 
• Mahindra & Mahindra has launched Supro Profit truck range in the country, with price starting at Rs 5.4 lakh (ex-showroom Mumbai).