Indian equity benchmarks extended their fall for the second straight session on Thursday and ended with losses of over two and half percent as fears over slower economic growth due to rising inflation dented investor sentiment. Markets made a gap-down opening and stayed in red for whole day, as traders were anxious as the United Nations said India is expected to grow 6.4% in 2022, well below the 8.8% growth in 2021, as higher inflationary pressures and uneven recovery of the labour market are likely to curb private consumption and investment. Some pessimism also came as India Ratings and Research said the average headline inflation is set to accelerate to a nine-year high at 6.9 per cent in FY23, and the Reserve Bank may go for more rate hikes during the fiscal. It added that the RBI will hike rates by another 75 basis points and possibly up to 125 basis points (1.25 percentage point) as well if the turn of events and data are very adverse. Trading sentiments remained subdued in the late trade with a private report stated that equity investors became poorer by over Rs 5 lakh crore in early trade on Thursday as domestic benchmark indices tumbled mirroring weak trends in global equities. Traders were cautious after cooking gas LPG price hiked by Rs 3.50 per cylinder, the second increase in rate this month following the firming of international energy rates. Non-subsidised LPG now costs Rs 1,003 per 14.2-kg cylinder in the national capital, up from Rs 999.50 previously. That apart, selling by foreign institutional investors (FIIs) also added to the pessimism in the markets. FIIs have been net sellers for eight straight months, and have dumped equities worth nearly Rs 38,000 crore in the month of May so far. Traders overlooked Chief Economic Adviser (CEA) V Anantha Nageswaran's statement that amid global uncertainties caused by the ongoing Russia-Ukraine war, India is still better placed among the large economies because of an improved financial system and a robust corporate health. He said India has already taken a host of reforms in banking and other sectors and is now focussing on stepping up public investment. Finally, the BSE Sensex fell 1416.30 points or 2.61% to 52,792.23 and the CNX Nifty was down by 430.90 points or 2.65% to 15,809.40.

The US markets ended lower on Thursday, expending their previous session's losses, as traders continued to debate when the markets will reach a bottom, with the S&P 500 closing in on bear market territory. Investors continued to dump equities on fears Federal Reserve rate hikes to fight rapid inflation would tip the economy into a recession. On the sectoral front, networking stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Networking Index down by 2.9 percent to its lowest closing level in over a year. Significant weakness was also visible among tobacco stocks, as reflected by the 2.6 percent slump by the NYSE Arca Tobacco Index. Computer hardware and transportation stocks also saw considerable weakness, with the NYSE Arca Computer Hardware Index and the Dow Jones Transportation Average falling by 1.9 percent and 1.8 percent, respectively. On the economic data front, a report released by the Labor Department showed first-time claims for U.S. unemployment benefits unexpectedly increased in the week ended May 14th. The report showed initial jobless claims rose to 218,000, an increase of 21,000 from the previous week's revised level of 197,000. Street had expected jobless claims to edge down to 200,000 from the 203,000 originally reported for the previous week. Meanwhile, existing home sales showed a significant decrease in the month of April, according to a report released by the National Association of Realtors (NAR). NAR said existing home sales tumbled 2.4 percent to an annual rate of 5.61 million in April after plunging by 3.0 percent to a revised rate of 5.75 million in March. Street had expected existing home sales to decrease by 0.7 percent.

Crude oil futures ended higher on Thursday on expectations of a pickup in energy demand on reports Chinese officials are planning to ease restrictions in Shanghai. Further, oil prices also rose as the dollar weakened. The broad dollar index was down 1% on the day after recent gains. Oil benchmarks often move inversely with the dollar as most global crude transactions are handled in dollars, so a rising greenback makes crude more expensive for big importers. Benchmark crude oil futures for June delivery rose $2.62 or 2.4% percent to settle at $112.21 a barrel on the New York Mercantile Exchange. Brent crude for July delivery surged $2.93 or 2.7 percent to settle at $112.04 a barrel on London's Intercontinental Exchange.

The rupee extended its losses on Thursday and ended lower against the US dollar weighed down by a negative trend in domestic equities and unabated foreign fund outflows. FIIs have been net sellers for eight straight months, and have dumped equities worth nearly Rs 38,000 crore in the month of May so far. In-line with other global central banks, the RBI, too, has turned hawkish and is mulling steep rate hikes also weighed investors' sentiments. However, downfall remain capped with Chief Economic Adviser (CEA) V Anantha Nageswaran's statement that amid global uncertainties caused by the ongoing Russia-Ukraine war, India is still better placed among the large economies because of an improved financial system and a robust corporate health. On the global front, euro rose on Thursday as investors priced in the chance of an aggressive near-term tightening path by the European Central Bank. Finally, the rupee ended at 77.65 (Provisional), weaker by 3 paise from its previous close of 77.62 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 8893.77 crore against gross selling of Rs 9794.46 crore, while in the debt segment, the gross purchase was of Rs 362.57 crore with gross sales of Rs 299.53 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.38 crore against gross selling of Rs 13.00 crore.

The US markets ended lower on Thursday with Cisco Systems slumping after giving a dismal outlook, while investors fretted about inflation and rising interest rates. Asian markets are trading on green on Friday after China cut a key lending benchmark to support a slowing economy. Indian markets took a big knock on Thursday their worst single-day loss in more than two months mirroring a sell-off across global markets coupled with persistent foreign fund outflows. Today, markets are likely to get positive start, after previous session's sell-off, tracking gains in Asian counterparts. Traders will be taking encouragement with Finance Minister Nirmala Sitharaman's statement that India's economic growth is likely to be robust at 8.9 percent in the current financial year, reflecting the country's strong resilience and speedy recovery. Sitharaman also expressed confidence that India will continue to achieve a high growth rate in the next financial year as well. Some support will come as RBI data showed bank credit grew by 10.82 per cent to Rs 120.46 lakh crore and deposits by 9.71 per cent to Rs 166.95 lakh crore in the fortnight ended May 6, 2022. In the fortnight ended May 7, 2021, bank advances stood at Rs 108.70 lakh crore and deposits at Rs 152.16 lakh crore. Meanwhile, NITI Aayog CEO Amitabh Kant has said it is the private sector's job to create wealth and the government should focus on laying down public policy framework. Sugar industry stocks will be in focus as Indian Sugar Mills Association (ISMA) said that sugar exports have risen by 64 per cent to 71 lakh tonnes during October 2021-April 2022 period as compared to 43.19 lakh tonnes of sugar exported during the corresponding period of the last year. There will be some reaction in agriculture industry related stocks as the third advance estimate released by the agriculture ministry showed that India's foodgrain production will rise 1.2% on year to a new record of 314.51 million tonne (MT) for the 2021-22 crop year (July-June). Besides, the IPO (initial public offering) of eMudhra, the largest licensed certified authority (CA) in the digital signature certificates market in India, is to open today. The price band for eMudhra's IPO has been fixed between Rs 243 and Rs 256 per share for Rs 413 crore IPO raise.

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

Nifty Top volumes

• ITC has reported a11.60% rise in its consolidated net profit at Rs 4259.68 crore for Q4FY22 as compared to Rs 3816.84 crore for Q4FY21. 
• Bharti Airtel is eyeing to reach the target ARPU of Rs 300 in five years while the next tariff hike, which is pending this year, will help the company cross Rs 200 mark. 
• Tech Mahindra has expanded its collaboration with long-standing partner Pegasystems to create an expanded ecosystem over the next five years. 
• Power Grid Corporation of India has been declared as the successful bidder under Tariff based competitive bidding to establish Intra State transmission system of Uttar Pradesh.