Indian equity benchmarks failed to hold their intraday gains and closed lower for the third consecutive session on Thursday, pulled down by index majors ITC and State Bank of India after their fourth quarter earnings failed to cheer investors. Markets made an optimistic start as traders took support with a private report that the country's current account deficit may narrow to 1.4 per cent of GDP or $50 billion in 2023 as compared to 2.4 per cent in the previous year as net remittances flows are expected to be $104 billion. Sentiments remained positive with Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh's statement that the productionlinked incentive (PLI) scheme is showing significant dividends across many sectors. He said the benefits under the PLI scheme are yielding positive results and thus, the government is considering extending the benefits of the PLI scheme to some labourintensive sectors. However, in the late afternoon deals, markets erased all of their gains to end lower on the back of profit booking across sectors and in heavyweights. Traders also turned cautious with a private report that the value of foreign portfolio investment (FPI) in Indian equities was at $542 billion in the March quarter of 2023, a decline of 11 per cent from the preceding year, largely due to the exodus of foreign money from the domestic market. In comparison, the value of FPI in Indian equities was $612 billion in the JanuaryMarch quarter of 2022. Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the Customs duties of India are very often misconstrued to be high on most items, raw materials, intermediates but in reality, the duties are very low. He said that the duties on technological items that are helping the Indian economy grow are very low. Finally, the BSE Sensex fell 128.90 points or 0.21% to 61,431.74 and the CNX Nifty was down by 51.80 points or 0.28% to 18,129.95.

Extending previous session's gains, the US markets ended higher on Thursday as traders continue to take support report that optimism lawmakers will eventually reach an agreement on raising the U.S. debt ceiling. Following a meeting earlier in the week, President Joe Biden and House Speaker Kevin McCarthy, R-Calif., both expressed optimism a deal will be reached. Market participants also reacted positively to quarterly results from Walmart (WMT), with the retail giant climbing by 1.3 percent. The advance by Walmart came after the company reported better than expected first quarter results and raised its full-year guidance. On the economic data front, the Labor Department released a report showing first-time claims for U.S. unemployment benefits fell by more than expected in the week ended May 13th. The report said initial jobless claims slid to 242,000, a decrease of 22,000 from the previous week's unrevised level of 264,000. The bigger than expected drop came after jobless claims reached their highest level since the week ended October 30, 2021 in the previous week. A separate report released by the Federal Reserve Bank of Philadelphia showed a continued contraction in regional manufacturing in the month of May, although the pace of contraction slowed by more than expected. The Philly Fed said its diffusion index for current activity surged to a negative 10.4 in May from a negative 31.3 in April. The National Association of Realtors (NAR) also released a report unexpectedly showing a steep drop in U.S. existing home sales in the month of April. NAR said existing home sales plunged by 3.4 percent to an annual rate of 4.28 million in April after tumbling by 2.6 percent to a revised rate of 4.43 million in March. The extended pullback surprised street, who had expected existing home sales to inch up by 0.1 percent compared to the 2.4 percent slump originally reported for the previous month.

Amid concerns about the outlook for demand, crude oil futures ended lower on Thursday. The recent data showing an increase in U.S. crude inventories last week also added pressure on oil prices. EIA data showed that the U.S. oil inventories jumped unexpectedly last week but that was due to another release from the Strategic Petroleum Reserve. Crude inventories rose by 5 million barrels in the week to May 12 to 467.6 million barrels, compared with analysts' expectations for a 900,000-barrel drop. At the same time, gasoline inventories dropped as demand surged to its highest since 2021. Benchmark crude oil futures for June delivery fell $0.97 or about 1.3 percent to settle at $71.86 a barrel on the New York Mercantile Exchange. Brent crude for July delivery declined $1.12 or 1.4 percent to settle at $75.84 a barrel on London's Intercontinental Exchange.

Rupee settled lower against dollar on Thursday weighed down by a strong greenback in the overseas market and a negative trend in domestic equities. Traders were worried with private report that the value of foreign portfolio investment (FPI) in Indian equities was at $542 billion in the March quarter of 2023, a decline of 11 per cent from the preceding year, largely due to the exodus of foreign money from the domestic market. In comparison, the value of FPI in Indian equities was $612 billion in the January-March quarter of 2022. On the global front, sterling was falling back towards a three-week low against the dollar on Thursday, as investors remained cautious after the pound's recent rally, with the economy stagnating and the labour market softening. Finally, the rupee ended at 82.59 (Provisional), weaker by 22 paise from its previous close of 82.37 on Wednesday.

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 7597.62 crore against gross selling of Rs 6791.83 crore, while in the debt segment, the gross purchase was of Rs 1881.05 crore against gross selling of Rs 377.42 crore. Besides, in the hybrid segment, the gross buying was of Rs 459.95 crore against gross selling of Rs 142.65 crore.

The US markets ended higher on Thursday with Walmart's strong earnings and optimism that lawmakers will eventually reach an agreement on raising the U.S. debt ceiling helping underpin sentiment. Asian markets are trading mostly higher on Friday though Chinese and Hong Kong markets fell sharply on concerns that China's economic recovery is losing steam. Indian markets extended their losses for third straight session on Thursday weighed down by profit-taking as Q4 earnings fail to lift Dalal Street amid fears of a US debt default. Today, the markets are likely to get flat-to-positive start tracking gains in global peers. Foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FIIs) remained net buyers and bought shares worth Rs 970.18 crore on May 18, according to provisional data from the National Stock Exchange. Some support will also come as S&P Global Ratings affirmed India's sovereign rating at BBB- for the long term and A-3 for the short term, with a stable outlook, as sound economic fundamentals were expected to underpin growth over the next two to three years. Traders may take note of report that India and Britain are struggling to make progress in free trade talks due to differences on some key tariff lines and investment protection rules, making a deal unlikely during Prime Minister Narendra Modi's second term ending next year. Meanwhile, The Securities Exchange Board of India (Sebi) has proposed to make the total expense ratio (TER) charged by mutual funds (MFs), inclusive of the Goods and Services Tax (GST) charged on management fee and has shared revised expense slabs for MFs to account for the tax outgo. Oil & gas sector stocks will be in focus as oil marketing companies (OMCs) did not change the fuel prices on May 18 the petrol and diesel rates continue to remain the same at the prevailing prices in major metros across India. Shares of NTPC, Power Grid, Punjab National Bank, JSW Steel, Zomato, Glenmark Pharma and Delhivery, among others, will be on the radar ahead of their Q4 result. Moreover, Nexus Select Trust REIT is likely to make debut on stock exchange on May 19.

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

Nifty Top volumes

• ITC has reported marginal rise of 3.06% in its consolidated net profit at Rs 5,225.02 crore for Q4FY23 as compared to Rs 5,070.09 crore for the same quarter in the previous year. 
• Tech Mahindra has entered into a strategic partnership with EarthID. 
• Bharti Airtel has surpassed the 2 million unique 5G user mark on its network in Tamil Nadu. 
• HCL Technologies has launched its conversion solution for demand and supply chain segmentation for SAP S/4HANA.