Bulls remained in control on Dalal Street for the second day running and comfortable ended the day with gains of over a percent on Friday, led by strong buying support in IT, TECK and Capital Goods stocks amid a positive trend in global equities. Markets made optimistic start and stayed in green for whole day as traders got encouragement with economic research think-tank Centre for Monitoring Indian Economy (CMIE) has estimated that labour participation rate (LPR) was higher in rural India during the period January to April 2022. LPR, defined as the number of persons of the labour force employed as a percentage of working age population, is 40.9 in rural India as compared to 37.4 in urban India during the period January to April 2022. Some support also came with a private report that the Reserve Bank will opt for a larger, 0.50 per cent, hike in key rates at its next monetary policy review in June to protect medium term economic stability in face of the uncomfortable inflation situation. Besides, the government has waived late fees for two months till June for delayed filing of GST returns for financial year 2021-22 by small taxpayers registered under the composition scheme. Key gauges extended gains in late afternoon deals, amid a private report stating that India's economy maintained its momentum in April as a wider reopening from the pandemic kept rising prices from depressing demand for the time being. Activity in the services sector as well as factories gained last month, while the three-month weighted averages of monthly changes in indicators from exports to credit demand suggested enduring strength. Sentiments remained positive as the government relaxed norms for ministries and department to utilise unspent amounts in the subsequent quarter in the same financial year in a bid to push public expenditure. Traders overlooked SBI's statement that upcoming release of official data for economic performance is likely to register a 2.7 per cent growth for the January-March period, and the FY22 growth is expected to be 8.5 per cent. Meanwhile, Commerce and Industry Minister Piyush Goyal said the way things are progressing between the two negotiating teams, a free trade agreement (FTA) between India and the UK could be ready by Diwali without the need for an interim early harvest agreement. Finally, the BSE Sensex rose 632.13 points or 1.17% to 54,884.66 and the CNX Nifty was up by 182.30 points or 1.13% to 16,352.45. 

Extending their previous session's gains, the US markets settled significantly higher on Friday. The major averages continued to recover after hitting their lowest levels in over a year in recent sessions. Sentiments got a boost following the release of a Commerce Department report showing a slowdown in the pace of core consumer price growth in the month of April. A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth slowed to 4.9 percent in April from 5.2 percent in March. The data contributed to optimism that the Fed will slow the pace of monetary policy tightening in the second half of the year. The inflation reading was included in a report showing personal income in the U.S. increased by slightly less than expected in the month of April. The report showed personal income rose by 0.4 percent in April after climbing by 0.5 percent in March. Street had been expecting another 0.5 percent increase. Meanwhile, the Commerce Department said personal spending advanced by 0.9 percent in April after surging by an upwardly revised 1.4 percent in March. Personal spending was expected to increase by 0.7 percent compared to the 1.1 percent jump originally reported for the previous month. Traders largely shrugged off a separate report from the University of Michigan showing consumer sentiment in the U.S. deteriorated by even more than previously estimated in the month of May. The report showed the consumer sentiment index for May was downwardly revised to 58.4 from the preliminary reading of 59.1. Street had expected the index to be unrevised. The consumer sentiment index is even further below the April reading of 65.2, slumping to its lowest level since hitting 55.8 in August of 2011.

Crude oil futures ended higher Friday, with the U.S. benchmark posting its highest finish in more than 11 weeks, amid rising hopes about increased demand for fuel during the summer season, and the prospect of an EU ban on Russian oil. European Council President Charles Michel said earlier this week that he is confident that an EU-wide agreement on the next major package of sanctions against Russia can be reached before the council's next meeting on May 30. According to the data released by Baker Hughes, the number of total active drilling rigs in the United States fell by 1 this week, after the 14 rig increase in the week prior. The total rig count slipped to 727 this week, 270 rigs higher than the rig count this time in 2021. Oil rigs in the U.S. fell this week by 2 rigs to 574, while gas rigs rose by 1 to 151. The report also said U.S. drillers have added 77 rigs since Russia invaded Ukraine. Benchmark crude oil futures for July delivery rose 98 cents or 0.9% percent to settle at $115.17 a barrel on the New York Mercantile Exchange. Brent crude for July delivery gained $2.03 or 1.7 percent to settle at $119.43 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally higher against dollar on Friday, on persistent selling of the American currency by exporters and healthy gains in domestic equity markets. Traders took some solace with Piyush Goyal's statement that the way things are progressing between the two negotiating teams, a free trade agreement (FTA) between India and the United Kingdom could be ready by Diwali without the need for an interim early harvest agreement. However, upside remain capped as Moody's Investors Service in its update to Global Macro Outlook 2022-23 has lowered India's economic growth projection to 8.8 per cent for 2022 from 9.1 per cent earlier, citing high inflation. The rating agency however maintained its 2023 growth forecasts at 5.4 per cent. On the global front, dollar edged higher on Friday but was on track for its biggest weekly drop in nearly four months as traders lowered Federal Reserve rate hike expectations amid signs the U.S. central bank might slow or even pause its tightening cycle in the second half of the year. Finally, the rupee ended at 77.58 (Provisional), stronger by 3 paise from its previous close of 77.61 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 9244.79 crore against gross selling of Rs 9809.08 crore, while in the debt segment, the gross purchase was of Rs 494.50 crore with gross sales of Rs 95.07 crore. Besides, in the hybrid segment, the gross buying was of Rs 15.55 crore against gross selling of Rs 17.38 crore.

The US markets ended higher on Friday as signs of peaking inflation and consumer resiliency sent investors into the long holiday weekend with growing optimism that the Federal Reserve will be able to tighten monetary policy without tipping the economy into recession. Asian markets are trading mostly in green on Monday as investors wager on an eventual slowdown in US monetary tightening following sharp rate hikes in the coming two months. Indian markets rose to three-week closing highs on Friday, boosted by gains across most sectors, as the market entered the June futures & options series. Today, markets are likely to begin the week in the green, rising further from three-week closing highs, tracking gains in global markets. Traders will be taking encouragement as RBI data showed that India's forex reserves increased by $4.23 billion to $597.509 billion for the week ended May 20 on the back of a high accretion of core currency assets. The country's foreign exchange reserves had declined by $2.676 billion to $593.279 billion in the previous reporting week ended May 13. Some support will come with report that State finances showed improvement in 2021-22 as the consolidated gross fiscal deficit (GFD) of 26 states was lower by 31.5 per cent than a year ago. Traders may take note of report that making a strong case for structural reforms, the Reserve Bank said they are essential for sustained, balanced and inclusive growth, and also to deal with the after-effects of the pandemic. Besides, investors will be eyeing the GDP numbers to be out later in the week for further cues. A private report stated that India's economic recovery from the COVID-19 pandemic likely stumbled again in the first quarter of this year primarily due to Omicron-related restrictions and higher inflation. Traders may be concerned as the Reserve Bank warned that there is a risk of high wholesale price inflation (WPI) exerting pressure on retail inflation. Meanwhile, Prime Minister Narendra Modi will release the 11th installment of financial benefits worth Rs 21,000 crore under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme to more than 10 crore farmers on May 31 in Shimla, Himachal Pradesh. Crude oil-related stocks will be in limelight as Brent crude has surged past $120/barrel-mark. Aviation, paint, tyre, cement, and oil marketing companies (OMCs) may be negatively impacted, while oil exploration firms could gain. There will be some reaction in power stocks with a private report that a lower pre-monsoon coal stock at thermal power plants in India is suggestive of another power crisis in July-August. Ethos' Rs 472-crore IPO, which was subscribed 1.04 times, will be making stock market debut on Monday, 30 May 2022. The issue had received bids for 41.39 lakh shares against the 39.78 lakh shares on offer, and was sold at a price band of Rs 836-878 apiece. Also, leg of March quarter results will keep investors busy today.

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

Nifty Top volumes

• ONGC has drawn up comprehensive roadmap to further intensify its exploration campaign, allocating capital expenditure of about Rs 31,000 crore in next 3 fiscal years in FY 2022-25. 
• Sun Pharmaceutical Industries' subsidiary -- S.C. Terapia S.A., Romania has acquired the Uractiv portfolio from Fiterman Pharma in Romania. 
• Tata Motors has incorporated a wholly owned subsidiary, viz., TSCMSL for undertaking urban mass mobility business interalia under an own, operate and maintain model. 
• M&M has launched the New Bolero City Pik-Up, an addition to its existing Pik-Up range, in Maharashtra.