Extending previous session's northward journey, Indian equity benchmarks ended at their fresh record closing levels on Friday. Both the S&P BSE Sensex and the NSE Nifty 50 settled above crucial 55,400 and 16,500 levels, respectively. Markets made gap-up opening and continued to move higher, on the back of promising inflation and industrial production data. Retail inflation eased to a three-month low of 5.59 per cent in July, mainly due to softening food prices, after holding above 6% for two months in a row. The Consumer Price Index (CPI) based inflation was 6.26 per cent in June and 6.73 per cent in July 2020. Besides, Industrial production surged by 13.6 per cent in June mainly due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained below the pre-pandemic level. In June 2021, the IIP stood at 122.6 points compared to 107.9 point in the same month last year. Sentiments on the street also remained optimistic with Finance Minister Nirmala Sitharaman's statement that the government is an active participant in the recovery process and remains committed to reforms as is evident from a series of tangible steps taken including the passing of seven critical bills related to finance and corporate affairs in the monsoon session of parliament, commitment towards disinvestment and privatization and using technology to improve tax buoyancy. Markets extended rally in second half of trade to settle near intraday highs, as Commerce and Industry Minister Piyush Goyal assured the industry that the government will protect its interests in free trade agreements (FTAs) and these pacts would be finalised after holding detailed discussions with all the stakeholders. The market sentiment also received a boost after National Statistical Office (NSO) reported that manufacturing sector, which constitutes 77.63 per cent of the Index of Industrial Production (IIP), grew by 13 per cent in June this year due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained below the pre-pandemic level. Besides, recognising the role of innovations to strengthen India's response to COVID-19 crisis and preparedness for emerging healthcare needs, the National Health Authority has signed a MoU with the Indian Institute of Technology Delhi. Finally, the BSE Sensex rose 593.31 points or 1.08% to 55,437.29, while the CNX Nifty was up by 164.70 points or 1.01% to 16,529.10.   

The US markets ended marginally higher on Friday despite Dow and the S&P 500 both climbing to fresh record highs early on in the session. Some cautiousness came as data showing a significant drop in U.S. consumer sentiment, and concerns about the impact of surging cases of the Delta variant of the coronavirus on growth outweighed buoyant earnings updates from some top notch companies. The University of Michigan's preliminary report said U.S. consumer sentiment slumped to 70.2 in August 2021, from 81.2 in the previous month and well below market expectations of 81.2. It was the lowest reading since December 2011. Data from the Labor Department showed U.S. import prices rose by 0.3 percent in July after surging up by a revised 1.1 percent in June. Street had expected import prices to climb by 0.6 percent in July compared to the 1 percent jump originally reported for the previous month. Besides, the Labor Department said export prices shot up by 1.3 percent in July following a 1.2 percent leap in the previous month. Export prices were expected to increase by 0.8 percent. Meanwhile, Walt Disney shares closed higher despite paring substantial portion of early gains. The stock rose on better-than-expected quarterly earnings and a strong growth of its customer base. Salesforce.com moved higher on strong results. Microsoft, Netflix, Comcast and WPP closed higher. DoorDash shares tumbled Friday morning after reporting wider second-quarter loss, but rebounded as the session progressed to close with a gain of about 3.5 percent. Boeing, American Express, JP Morgan Chase and Goldman Sachs shed 1 to 1.4 percent.

Crude oil futures ended lower on Friday with traders largely making cautious moves as they weighed the outlook for energy demand amid lingering worries about spikes in the delta variant of the coronavirus in several countries. The International Energy Agency (IEA) said that energy demand is set to rise at a slower pace over the rest of 2021 because of the surge in infections from the Delta variant of the coronavirus. According to a report released by Baker Hughes this afternoon, the combined oil and gas rig count in the U.S. rose for a second week in a row, going up by nine to 500 in the week to August 13, the highest level since April 2020. Crude oil futures for September fell $0.65 or 0.9 percent to settle $68.44 barrel on the New York Mercantile Exchange. October Brent crude dropped $1.22 or 1.7 percent to settle at $70.09 a barrel on London's Intercontinental Exchange.

Indian rupee ended flat on Friday tracking foreign fund outflows. Traders got anxious with a private report that monsoon rains in India in the week through Wednesday were below average for the second straight week, the weather office said, raising concerns over production of summer-sown crops such as cotton, soybean, corn and rice. However, promising inflation and industrial production provided support to the domestic currency. Retail inflation eased to a three-month low of 5.59 per cent in July, mainly due to softening food prices, after holding above 6% for two months in a row. Besides, Industrial production surged by 13.6 per cent in June mainly due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained below the pre-pandemic level. On the global front, the U.S. dollar edged higher on Friday, on track for a second consecutive weekly gain versus its major rivals, as investors weighed the possibility of the Federal Reserve announcing its plans to reduce its stimulus in the coming weeks. Finally, the rupee ended unchanged from its previous close of 74.25 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 6768.43 crore against gross selling of Rs 6478.59 crore, while in the debt segment, the gross purchase was of Rs 218.94 crore with gross sales of Rs 539.67 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.56 crore against gross selling of Rs 12.14 crore.

The US markets ended higher on Friday boosted by forecast-beating corporate earnings. Asian markets are trading mostly in red on Monday after a raft of Chinese data showed a surprisingly sharp slowdown in the engine of global growth, just as much of the world races to stem the spread of the Delta variant of COVID-19 with vaccinations. Indian markets scaled fresh all-time highs and closed at their highest closing levels on Friday as bulls commanded D-Street's movement. Today, markets are likely to make pessimistic start of holiday-shortened week following a muted trend in the Asian peers, in the absence of any major domestic trigger. Equity markets would remain closed on Thursday, August 19 for Muharram. On the macroeconomic front, the WPI data will be released on August 16. Traders will be concerned with a private report that it is highly unlikely that India will become a $5 trillion economy by 2024-25 due to the slowdown caused by the COVID-19 pandemic. Some cautiousness will come as India recorded 33,221 new Covid-19 cases and 421 deaths in the past 24 hours, taking its tally to 32,225,175 and the death toll to 431,674. Kerala reported 18,582 new infections, Maharashtra 4,797, followed by Andhra Pradesh (1,506), Tamil Nadu (1,896), Karnataka (1,669), West Bengal (673) and Delhi (53). However, some respite may come as the data released by the commerce ministry showed that the country's exports surged 49.85 per cent to $35.43 billion in July on account of healthy growth in petroleum, engineering, and gems and jewellery segments, even as the trade deficit widened to $10.97 billion during the month. Imports during the month also rose by about 63 per cent to $46.40 billion. Some support may also come as RBI data showed country's foreign exchange reserves increased by $889 million to a lifetime high of $621.464 billion in the week ended August 6, 2021. Meanwhile, India and Russia have discussed expanding cooperation in the energy sector as New Delhi looks at newer sources of oil and natural gas to diversify its import basket. There will be some buzz in textile industry stocks as the government notified the RoSCTL scheme for textiles exporters and said the duty credit scrips under this support measure would be issued without insisting on realisation of the export proceeds. Aviation stocks will be in focus as the Directorate General of Civil Aviation (DGCA) said around 50.07 lakh domestic passengers travelled by air in July, 61 per cent higher than the 31.13 lakh who travelled in June. It also said 21.15 lakh people and 57.25 lakh had travelled within the country by air in May and April, respectively. There will be some reaction in auto stocks as Prime Minister Narendra Modi formally launched the National Automobile Scrappage Policy, which he said would attract investments of about Rs 10,000 crore. He added the policy would also help in getting rid of unfit and polluting vehicles in a scientific manner. Meanwhile, four companies will list on bourses today, namely Devyani International, Windlas Biotech, Krsnaa Diagnostics, and Exxaro Tiles.

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

Nifty Top volumes

• L&T's Heavy Engineering arm has won all order for Oxidation Reactor from Technip Energies-India against stiff global competition. 
• ITC is planning to invest around $2 billion as part of its ITC Next strategy, under which it will explore opportunities to craft disruptive business models.
• Coal India is planning to infuse Rs 14,000 crore till FY25 in first-mile connectivity infrastructure in two phases. 
• Tech Mahindra has expanded its collaboration with Microsoft to strengthen hybrid cloud capabilities.