Earnings optimism and positive global cues fuelled a broad-based rally in the markets with Sensex and Nifty settling around one and half percent higher each on Friday. Benchmarks made gap-up opening, as sentiments got boost 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 optimism also came 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. Markets extended gains in late afternoon session to end at record high levels, taking support from report indicated that job listings continued to improve in December with industries including telecom, agro-based units, and media and entertainment returning to the pre-COVID-19 levels. Some support also came as the Central Board of Indirect Taxes & Customs (CBIC) has introduced liberalised Authorised Economic Operator package for micro, small and medium enterprises (MSMEs) for swift customs clearances. In order to attract MSMEs to become Authorised Economic Operators (AEOs) and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry. Market participants overlooked the government 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. Finally, the BSE Sensex rose 689.19 points or 1.43% to 48,782.51, while the CNX Nifty was up by 209.90 points or 1.48% to 14,347.25.

The US markets ended higher with notable gains on Friday amid optimism that a Democrat-controlled government will lead to more fiscal stimulus and a better handling of the coronavirus vaccine rollout. In a statement on Thursday, President Donald Trump finally acknowledged a new administration will be inaugurated on January 20th, although he declined to mention President-elect Joe Biden by name. Trump has repeatedly refused to accept the outcome of the election, spouting fraudulent claims of widespread voter fraud that inspired his supporters to assault the US Capitol building on Wednesday. Traders seem hopeful for a return to normalcy, as Democrats will control both houses of congress and the White House but do not have the margin in the Senate to force through radical legislation. Traders were also reacting to a closely watched Labor Department report showing an unexpected decrease in US employment in the month of December. The Labor Department said non-farm payroll employment fell by 140,000 jobs in December after climbing by an upwardly revised 336,000 jobs in November. The decline surprised market participants, who had expected employment to increase by about 71,000 jobs compared to the addition of 245,000 jobs originally reported for the previous month. Employment decreased for the first time since April as the recent surge in coronavirus cases led to a nosedive in employment in the leisure and hospitality sector, which lost 498,000 jobs.  

Crude oil futures ended significantly higher on Friday, as recent data showing a drop in US crude stockpiles, and Saudi Arabia's decision to cut output continued to support the commodity. Data released by Baker Hughes said the oil drilling rigs count in the US rose for a seventh straight week, surging up by 8 to 275 this week. Earlier this week, Saudi Arabia made a surprise announcement, saying it would reduce crude output by 1 million barrels a day in February and March. This significantly offset OPEC+ decision to allow Russia and Kazakhstan to increase their outputs by a combined 75,000 barrels a day. Crude oil futures for February rose $1.41 or 2.8 percent to settle at $52.24 a barrel on the New York Mercantile Exchange. March Brent crude gained $1.61 or 3 percent to settle at $55.99 a barrel on London's Intercontinental Exchange.

Reversing prevision session losses, Indian rupee ended stronger against dollar on Friday due to fresh selling of the American currency by banks and exporters. Traders took support as CBIC introduced liberalised Authorised Economic Operator package for MSMEs for swift customs clearances. In order to attract MSMEs to become Authorised Economic Operators and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry. Firm trade in Indian markets also supported the upside of the rupee. On the global front, dollar held above a 2018 low against other major currencies on Friday ahead of fresh US jobs data likely to give clues on the extent of fiscal stimulus needed to prop up the coronavirus-hit economy. Finally, the rupee ended at 73.24, 7 paise stronger from its previous close of 73.31 on Thursday.

The FIIs as per Friday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 8599.75 crore against gross selling of Rs 7797.24 crore, while in the debt segment, the gross purchase was of Rs 340.50 crore with gross sales of Rs 1403.15 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.76 crore against gross selling of Rs 18.13 crore.

The US markets ended higher on Friday as hopes of more stimulus from Washington were shaken a bit by a senator's comments but later bolstered after US President-elect Joe Biden said his economic package will be in the trillions of dollars. Asian markets are trading mostly in green on Monday as trillions in new US fiscal stimulus plans were set to be unveiled this week, stoking a global reflation trade. Indian markets rallied more than 1 percent to end at record high levels on Friday on the back of robust buying in IT and auto stocks. Today, the start of new week is likely to be positive taking lead from other Asian peers. Traders will be taking encouragement with Assocham's statement that India's economy is showing decisive signs of a V-shaped recovery in 2021 with the return of consumer confidence, robust financial markets, an uptick in manufacturing and exporters braving it out in the global market with never-say-die spirit. Also, IHS Markit said Indian economy is likely to rebound with an 8.9 per cent growth in the fiscal year beginning April 2021 after economic activity showed significant improvement in the last quarter. Some support may come with report that India's exports grew 16.22 percent YoY to $6.21 billion in the first week of January, mainly driven by healthy growth in pharmaceuticals, and engineering sectors, reflecting signs of revival. Imports during January 1-7 this year too increased by 1.07 percent to $8.7 billion as against $8.6 billion in the same period of 2020. Besides, FPIs have pumped Rs 5,156 crore into Indian capital markets in the first six trading sessions this year amid expectations of strong third-quarter earnings and a reformist budget. As per depositories data, FPIs invested a net Rs 4,819 crore in equities and Rs 337 crore in debt segment between January 1 and 8. Traders may take note of report that India continues to show a downward trend in the new number of coronavirus cases. With tally at 10,467,431, it accounts for the 2nd highest cases of Covid-19 infections globally. Insurance industry stocks will be in limelight with report that the life insurance industry saw a 2.7 per cent contraction in premium collection in December, a second consecutive month of decline. There will be some buzz in oil & gas sector stocks with ratings agency ICRA in its latest report stating that the domestic demand for petroleum products is expected to increase at a healthy rate of 8 to 10 per cent in FY22 on a year-on-year basis. Banking stocks will be in focus as the Reserve Bank of India (RBI) expressed some concerns over zero-coupon bonds for the recapitalisation of public sector banks (PSBs) and discussion is on between the central bank and Finance Ministry to find a solution. There will be some reaction in coal industry stocks with a private report stating that India's coal import declined by 17 per cent to 137.16 million tonne (MT) in the April-November period of the current fiscal. There will be some result reactions too, to keep the markets in action.

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

Nifty Top volumes

• ONGC has approved the offer and issuance of unsecured, listed, redeemable, non-cumulative, taxable, NCDs worth Rs 1,500 crore on a private placement basis. 
• SBI and Indian Oil Corporation have launched a co-branded contactless RuPay debit card. 
• Tata Motors has launched its newest smart compact truck, the Tata Intra V20, in Nepal, in association with its sole authorised distributor for the country, Sipradi Trading. 
• Wipro has signed a Memorandum of Understanding with Israel's Tel Aviv University for research and analysis in quantum science and technology.