Indian equity benchmarks managed to end the choppy day of trade with marginal gains on Thursday. Markets made a negative start as traders remained cautious on report that India registered 17,015 fresh Covid-19 cases in last 24 hours, taking the tally to 10,512,8311. The five most affected states by total cases are Maharashtra (1974488), Karnataka (928806), Andhra Pradesh (885234), Tamil Nadu (827614), and Kerala (819765). Sentiments also remained dampened with Fitch Ratings stating that the Indian economy will suffer lasting damage from the coronavirus crisis and after an initial strong rebound in FY22 (fiscal year ending March 2022) growth will slow to around 6.5 per cent a year over FY23-FY26. Fitch said India's coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support. However, in second half of the trade, key gauges gained some traction and managed to end the day with marginal gain after India's inflation based on wholesale price index (WPI) eased to 1.22% (provisional) for the month of December 2020 as compared to 2.76% during the corresponding month of the previous year. Component wise, primary articles index having weight of 22.62%, declined by (-3.11%) to 146.5 (provisional) in December 2020 from 151.2 (provisional) for the month of November 2020. Traders also took some support with a private report that economic activity continued with its pace of normalisation and the festivities helped narrow the deficits as compared to the year-ago period in December. It also revised up wits FY21 GDP forecast to a contraction of 6.7 per cent, as against the official estimate of a 7.7 per cent contraction in the pandemic-impacted fiscal year. Finally, the BSE Sensex rose 91.84 points or 0.19% to 49,584.16, while the CNX Nifty was up by 30.75 points or 0.21% to 14,595.60.

The US markets ended lower on Thursday. The pullback by stocks seemed to coincide with an advance by treasury yields, which rebounded following the pullback seen on Wednesday. The increase by yields was partly attributed to remarks by Federal Reserve Chair Jerome Powell during a virtual event hosted by Princeton University. However, downside remained capped on optimism about additional fiscal stimulus helped generate early buying interest, as President-elect Joe Biden is expected to unveil a major relief package later today. A report said the price tag for the package is expected to be in the ballpark of $2 trillion. The package is expected to include an increase in direct payments to Americans as well as an extension of increased unemployment insurance and support for state and local governments. On the global front, a report released by the Labor Department showed US import and export prices both increased by more than expected in the month of December. The Labor Department said import prices climbed by 0.9 percent in December after edging up by a revised 0.2 percent in November. Street had expected import prices to rise by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month. Prices for fuel imports led the way higher, spiking by 7.8 percent in December after surging up by 4.8 percent in November. Rising petroleum prices more than offset lower natural gas prices. Excluding fuel imports, import prices rose by 0.4 percent in December after dipping by 0.2 percent in the previous month.

Crude oil futures ended higher on Thursday on hopes big stimulus from the Biden administration and the Covid vaccination drive will help lift energy demand. The recent data showing a drop in US crude inventories and Saudi Arabia's decision to cut crude output by 1 million barrels per day in February and March also contributed to oil's advance. A weak dollar also supported crude prices. Crude oil futures for February rose $0.66 or 1.3 percent to settle at $53.57 a barrel on the New York Mercantile Exchange. March Brent crude gained $0.25 or 0.4 percent to settle at $56.31 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against the American currency on Thursday, due to selling of the US currency by exporters and banks. This is the third consecutive session when the rupee is traded higher against dollar. Sentiments were positive as India's inflation based on wholesale price index (WPI) eased to 1.22% (provisional) for the month of December 2020 as compared to 2.76% during the corresponding month of the previous year. On the global front, pound rose on Thursday as pushed-back expectations for negative interest rates from the Bank of England and hopes for a quicker economic recovery in Britain given its lead in vaccinations across Europe buoyed the currency. Finally, the rupee ended at 73.04, 11 paise stronger from its previous close of 73.15 on Wednesday.

The FIIs as per Thursday's data were net buyer in equity segment and net seller in debt segment. In equity segment, the gross buying was of Rs 10374.83 crore against gross selling of Rs 8208.55 crore, while in the debt segment, the gross purchase was of Rs 738.50 crore with gross sales of Rs 940.75 crore. Besides, in the hybrid segment, the gross buying was of Rs 15.35 crore against gross selling of Rs 20.14 crore.

The US markets settled lower on Thursday as reports emerged about U.S. President-elect Joe Biden's pandemic aid proposal following earlier data that showed a weakening labor market. Asian markets are trading mostly in green on Friday as expectations of large U.S. stimulus under President-elect Joe Biden shored up sentiment. Indian markets ended at a record close on Thursday as IT stocks trimmed some losses after falling in early deals despite robust results of Wipro and Infosys. Today, the markets are likely to make flat-to-negative start tracking a dip in Wall Street overnight and a rise in oil prices. There will be some cautiousness as rating agency CRISIL projected CPI Inflation at 6.4% for fiscal 2021. it said after eight months above the Reserve Bank of India (RBI's) target band of 2-6%, Consumer Price Index (CPI) inflation was finally back in range, declining for the second straight month to a below-consensus 4.6% in December, from 6.9% in November. Average CPI inflation during April-December now measures 6.6%, down from the April-November average of 6.9%. Traders will be concerned as India registered 15,515 fresh Covid-19 cases in the last 24 hours, taking the tally to 10,528,346. Globally, more than 93.5 million people have been infected by the virus. However, some respite may come later in the day with report that Prime Minister Narendra Modi will launch India's Covid-19 vaccination drive tomorrow via video conferencing. This will be the world's largest vaccination programme covering the entire length and breadth of the country. Meanwhile, the government has notified a modified scheme to provide financial assistance to distilleries producing first-generation ethanol from feedstocks, including cereals. Besides, the Budget session of Parliament will commence from January 29, with Union Finance Minister Nirmala Sitharaman set to present the Union Budget on February 1. There will be some buzz in IT stocks with ICRA's report that demand for digital technologies and resumption of normal economic activities will drive sales for IT companies, and the sector will post a revenue growth of up to 9 per cent in 2021-22. Auto stocks will be in focus with industry body SIAM's statement that passenger vehicle wholesales in India slipped to a ten-year low in the April-December this fiscal, and the industry will have to work hard to regain better volumes and business health. NBFCs stocks will be in limelight amid a private report that non-banking finance companies (NBFCs) urged the Reserve Bank of India to relax compliance with norms for reserve ratio, priority sector and sectoral exposure while transforming into a bank. There will be some earnings announcements too to keep the markets buzzing.

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

Nifty Top volumes

• Infosys has signed definitive agreement to purchase assets and onboard employees of Carter Digital, one of Australia's leading and award-winning experience design agencies. 
• L&T's construction arm -- L&T construction has secured orders from prestigious clients for various businesses. 
• ICICI Bank and Niyo, a new age fintech have inked a tie-up to issue prepaid cards to workers of Micro, Small & Medium Enterprises. 
• Tata Motors has commenced production of its upcoming flagship SUV Safari.