Indian equity benchmarks erased all of their initial gains and ended marginally in red on Thursday, ahead of the announcement of advance estimate of gross domestic product (GDP) for financial year of 2020-21 (FY21). The benchmarks staged a gap up opening and traded firmly higher for most part of the day, taking support from Geneva-based World Trade Organisation (WTO) stating that during the period 2015-20, India has implemented several measures to facilitate trade, such as a reduction in the number of documents required and the automation of the customs clearance system for imports and exports. Some support also came with private report stating that in the upcoming union budget for FY 2021-22, the government is likely to announce SWIFT - Special Window for Financial Investors Facilitation - for big foreign investors in India.  SWIFT will cater to global financial investors with an investment proposal of more than Rs 5,000 crore. However, the sudden fall in benchmarks is last hour of trade was due to spike in volatility owing to weekly expiry of index futures and option contracts. Market participants also took a note of ICRA Ratings' report that non-banking finance companies (NBFCs) are likely to see a 7-9 percent growth in their asset under management (AUM) in FY22 but access to funding would be crucial for them to have a sustained improvement. Meanwhile, another report stated that the currency in circulation (CIC) expanded by 22.1 per cent in calendar year 2020, as people hoarded cash at a time when the nation went into a lockdown and uncertainty prevailed over how liquidity needs would be met. Data released by the Reserve Bank of India showed that in calendar year 2020, the currency in circulation growth was way higher than 2019's 11.8 per cent growth rate. Finally, the BSE Sensex fell 80.74 points or 0.17% to 48,093.32, while the CNX Nifty was down by 8.90 points or 0.06% to 14,137.35.

The US markets ended higher on Thursday as US lawmakers certified President-elect Joe Biden's victory after the process was delayed by several hours as supporters of President Donald Trump stormed the US Capitol building. After the Capitol building was finally secured, several Republican lawmakers abandoned plans to object to the certification of results from a number of states, although GOP opposition still led to a drawn out process. Trump said in a statement following the vote that there would be an orderly transition of power to Biden but continued his fraudulent claims of widespread voter fraud that helped spark the riot at the Capitol. The certification of Biden's victory along with Democratic victories in Georgia's Senate runoff elections will give Democrats control of the House, Senate and the White House. Traders seem optimistic a Democratic-controlled government will lead to additional stimulus, but with the narrow margin in the Senate preventing major tax hikes or other policies that negatively affect big business. Buying interest was also generated in reaction to a report from the Labor Department unexpectedly showing a modest decrease in first-time claims for US unemployment benefits in the week ended January 2. The report said initial jobless claims edged down to 787,000, a decrease of 3,000 from the previous week's upwardly revised level of 790,000. Street had expected jobless claims to rise to 800,000 from the 787,000 originally reported for the previous week.  

Magnifying their previous session's gains, Crude oil futures ended higher on Thursday with the recent data showing a drop in stockpiles continuing to support oil prices. Saudi Arabia's decision to cut its output by additional 1 million barrels per day in February and March too continued to contribute to oil's uptick. However, upside remained capped on worries about outlook for energy demand due to continued to spikes in coronavirus cases in several countries and tighter restrictions on movements limited oil's gains. Crude oil futures for February rose 20 cents or 0.4 percent to settle at $50.83 a barrel on the New York Mercantile Exchange. March Brent crude gained 8 cents or 0.2 percent to settle at $54.38 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly lower against dollar on Thursday, on increased demand for the greenback from importers and banks. Traders got cautious amid reports that the non-food component in the price basket will continue to keep inflation at a high level and result in a long pause in interest rates. The bank report said over a six month period, food inflation is likely to ease, but non-food may be sticky on account of rigidity in domestic fuel taxation, marginal hikes in manufacturing costs after months of the shutdown, commodity price rises, telecom price adjustments and return in demand impulses in certain core categories. On the global front; dollar edged higher on Thursday, hovering above its lowest levels in nearly three years on Thursday after Democrats won control of the U.S. Senate, clearing the way for possible larger fiscal stimulus under President-elect Joe Biden. Finally, the rupee ended at 73.31, 20 paise weaker from its previous close of 73.11 on Wednesday.

The FIIs as per Thursday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 6588.90 crore against gross selling of Rs 6934.18 crore, while in the debt segment, the gross purchase was of Rs 1683.79 crore with gross sales of Rs 1749.51crore. Besides, in the hybrid segment, the gross buying was of Rs 7.26 crore against gross selling of Rs 14.34 crore.

The US markets ended notably higher on Thursday as investors bet a Democrat-controlled Congress will deliver more stimulus spending to help the U.S. economy overcome a steep pandemic-induced downturn. Asian markets are trading in green on Friday following overnight gains on Wall Street that hit new record highs. Indian markets erased day's gains to end lower on Thursday dragged by selling in FMCG, IT and pharma stocks. Today, the markets are likely to make positive start mirroring firm global cues. Traders will be taking encouragement with report that India in 2020 has been one of the biggest and fastest-growing technology markets in the world. Digital and technology adoption in India has been increasing at a steady rate over the last few years, and the current COVID-19 pandemic has accelerated the rate of technology adoption across sectors, including in high involvement services such as education and healthcare. Some support will come with report that the RBI will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs 10,000 crore each on January 14. The decision was taken after a review of current liquidity and financial conditions. However, traders may be concerned with report that India's economy is set for its biggest annual contraction in records going back to 1952 as the rapid spread of coronavirus cases and measures to contain them hurt businesses and households. The statistics ministry in its first advance estimate said gross domestic product will shrink 7.7% in the financial year ending March 2021. There may be some cautiousness with private report that India's fiscal deficit for year ending in March is likely to be over 7% of gross domestic product, as revenue collections suffered from a lockdown and restrictions to rein in the spread of COVID-19. Besides, with 18,106 fresh Covid-19 cases, India's caseload now stands at 10,414,044. The country's death toll has mounted to 150,606. Aviation stocks will be in focus as global airlines body IATA said that domestic passenger traffic growth in India was 49.6 percent lower in November last year as compared to the corresponding month in 2019. There will be some reaction in sugar sector stocks with a private report stating that Indian sugar mills are aggressively signing export contracts after New Delhi approved a subsidy for overseas sales and as global prices hit their highest level in 3-1/2 years. Meanwhile, investors will be eyeing the Information technology (IT) major Tata Consultancy Services' (TCS) December quarter earnings to be released later in the day.

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

Nifty Top volumes

• SBI has concluded the issuance of $600 million (about Rs 4,500 crore) from bonds to fund expansion of overseas business. 
• Coal India is optimistic of closing the current financial year (FY21) with auction bookings of 120 million tonnes. 
• L&T's wholly owned subsidiary -- L&T Hydrocarbon Engineering has secured a Contract from ONGC for their new Living Quarter and Revamp at NQ Complex Project. 
• Maruti Suzuki India has reported 33.79% rise in its total production at 155,127 units in December 2020 as compared to 115,949 units produced in the same month last year.