Indian equity markets ended with significant gains on Thursday on across-the-board buying amid positive global cues after the US Fed signalled it could cut rates three times this year. Buoyant sentiments prevailed despite the weekly expiry of Nifty's F&O contracts. The markets made a positive start and stayed in green for whole day, as traders took support with CareEdge Ratings' report that India's economic activity likely hit a nine-month high in February, despite rural demand remaining weak and unemployment rising, thanks to a sharp expansion in exports, imports and corporate bond issuances. The CareEdge Economic Meter, a composite index covering 18 high-frequency economic indicators to track the state of the economy, suggested a 10.3% year-on-year uptick in activity levels. Traders took note of India's executive director at International Monetary Fund (IMF) Krishnamurthy Venkata Subramanian's statement that India needs to grow at 8 per cent on sustained basis to create sufficient jobs to reduce poverty and inequality.  However, in afternoon deals, markets pared some of their initial gains. Traders got cautious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 2,599.19 crore on March 20, 2024. But, markets managed to hold notable gains to end higher, taking support from a report showing that India's business activity ended this fiscal year on a high note, expanding at the fastest rate in eight months in March. According to the report, the headline HSBC Flash India Composite PMI Output Index - a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors -- rose to 61.3 in March. Moreover, rising from 60.6 in February, the latest figure indicated a sharp rate of expansion that was the strongest since July 2023. Sentiments remained up-beat with Prime Minister Narendra Modi's statement that India will lead the world in AI capabilities, and exhorted young entrepreneurs and startups to work on Indian solutions for global applications to solve challenges faced by nations across the world. Finally, the BSE Sensex rose 539.50 points or 0.75% to 72,641.19 and the CNX Nifty was up by 172.85 points or 0.79% to 22,011.95.

The US markets ended higher on Thursday, magnifying their previous session's gains, as stocks continued to benefit from positive reaction to Wednesday's monetary policy announcement by the Federal Reserve. While the Fed left interest rates unchanged, as widely expected, the central bank also maintained its forecast for three interest rate cuts this year. Further, support also came in as the Labor Department released a report unexpectedly showing a slight drop by first-time claims for U.S. unemployment benefits in the week ended March 16th. The Labor Department said initial jobless claims edged down to 210,000, a decrease of 2,000 from the previous week's revised level of 212,000. The dip surprised participants, who had expected jobless claims to rise to 215,000 from the 209,000 originally reported for the previous week. Meanwhile, the National Association of Realtors (NAR) released on report showing existing home sales unexpectedly continued to soar in the month of February. NAR said existing home sale index spiked by 9.5 percent to an annual rate of 4.38 million in February after jumping by 3.1 percent to a rate of 4.00 million in January. The continued surge came as a surprise to participants, who had expected existing home sales to pull back by 1.5 percent to a rate of 3.94 million. With the unexpected increase, existing home sales reached their highest level since hitting an annual rate of 4.530 million in February 2023. On the sectoral front, Semiconductor stocks continued to see significant strength on the day, resulting in a 2.3 percent surge by the Philadelphia Semiconductor Index. Chipmaker Micron (MU) helped lead the sector higher, soaring by 14.1 percent after reporting better than expected fiscal second quarter results and providing upbeat fiscal third quarter guidance.

Crude oil futures ended lower on Thursday on stronger dollar. Oil prices also fell on reports confirming U.S. has drafted a U.N. resolution calling for a ceasefire and hostage deal in Gaza. The U.S. secretary of state, Antony Blinken, presented the resolution as calling for an immediate ceasefire tied to the release of hostages. However, recent data showing a drop in crude inventories and gasoline stockpiles last week supported oil prices and limited the commodity's downside. Benchmark crude oil futures for April delivery dropped $0.61 or about 0.74% to settle at $81.07 a barrel on the New York Mercantile Exchange. Brent crude for May delivery fell by $0.17 or about 0.19% to $85.78 per barrel on London's Intercontinental Exchange.

Indian rupee appreciated against the US dollar on Thursday supported by a firm trend in domestic equities and a weak greenback amid rising appetite for riskier assets. Sentiments were positive as India's business activity expanded at the fastest rate in March, with the strongest increase in private sector output, amid a pick-up in growth at goods producers. Besides, buoyant demand conditions fuelled growth, with aggregate sales rising at a sharp and accelerated pace. HSBC Flash India Composite PMI Output Index - a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors -- rose to 61.3 in March. On the global front, the yen rose sharply on Thursday in part due to a broadly weaker dollar, but also drew support from expectations of further rate hikes from the Bank of Japan later this year and some jawboning efforts from Japanese government officials. Finally, the rupee ended at 83.13 (Provisional), stronger by 6 paise from its previous close of 83.19 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 11257.59 crore against gross selling of Rs 13500.35 crore, while in the debt segment, the gross purchase was of Rs 4386.02 crore with gross sales of Rs 2226.69 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.42 crore against gross selling of Rs 9.13 crore.

The US markets ended higher on Thursday after the Swiss National Bank became the first major central bank to ease policy in this cycle, a day after the Federal Reserve maintained its outlook for 2024 rate cuts. Asian markets are trading mostly in red on Friday as Japan inflation accelerated in February. Indian markets ended notably higher on Thursday after the US Federal Reserve stayed on course to cut key rate thrice in 2024, despite elevated inflation. Today, markets are likely to get cautious start amid mixed global cues. Foreign fund outflows likely to dampen sentiments in the markets. Provisional data from the NSE showed that foreign institutional investors (FIIs) net sold shares worth Rs 1,826.97 crore on March 21. There will be some cautiousness with a private report that Private equity and venture capital investments declined to $2.2 billion in February, 39 per cent down when compared with the year-ago period's $3.7 billion. On a month-on-month basis PE, VC investments have witnessed a decline of 67 per cent. The number of deals were higher at 120 transactions in February, as compared to 86 deals in January and 57 in February 2023. However, some support may come as Amitabh Kant, former chief executive officer of NITI Aayog and India's G20 Sherpa said India must aim to accelerate its pace of growth to 9-10 per cent over a three-decade period. Kant suggested that if India grows at 10 per cent, it would mean the gross domestic product (GDP) would surpass $35 trillion, elevating the per capita income to around $24,000. Kant emphasised India's potential to outpace Japan and Germany, projecting it to become the world's third-largest economy by 2027. Banking stocks will be in focus as a survey conducted by industry body FICCI and banking association Indian Banks' Association (IBA) showed that the health of the Indian banking sector continues to improve with better asset quality and high credit growth. As per the survey, on asset quality, a large majority (77 per cent) of the respondent banks reported a decrease in the NPA levels in the last six months. There will be some reaction in IT stocks amid report that Accenture has lowered its revenue forecast for fiscal year 2024 citing global uncertainty and weak client spending on consulting services. It sees full-year revenue growth to be between 1-3 per cent, down from the earlier projection of 2-5 per cent. Aviation industry stocks will be in limelight after data released by the Directorate General of Civil Aviation (DGCA) showed that Indian carriers are set to operate 24,275 domestic flights every week during this year's summer schedule, marking a 5.97 per cent year-on-year (Y-o-Y) increase. The summer schedule for this year commences from March 31 and continues until October 26, 2024 for the aviation sector.

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

Nifty Top volumes

• ICICI Bank has purchased 22,500 shares of I-Process Services (India) through off-market transactions.
• SBI Cards and Payment Services (SBI Card) in partnership with Titan Company has launched Titan SBI Card.
• Bharti Airtel has deployed additional sites in Bankura district to densify its network.
• TCS has signed a multimillion-dollar strategic partnership to carry out the end-to-end IT transformation of Ramboll.