Indian equity benchmarks ended at record closing highs on Friday ahead of Federal Reserve Chair Jerome Powell's speech due later in the day. The benchmarks edged lower in morning as India recorded a spike of 44,558 new Covid-19 cases in the past 24 hours out of which, over 31,000 were from Kerala. However, key indices soon witnessed a swift recovery after the initial fall and traded positive for the rest of the session. Traders took some support as Finance Minister Nirmala Sitharaman discussed with her BRICS counterparts the key areas of cooperation that would be crucial in supporting recovery of the grouping's economies and maintaining macroeconomic stability, while protecting against future uncertainties posed by the COVID-19 pandemic. Some optimism also came with private report stated that hiring activity witnessed an overall 4 per cent sequential growth in July and the uptick was mainly spread across metros. It said compared to June, July 2021 saw a notable overall monthly growth of 4 per cent in hiring across all metros. Markets maintained upward momentum in afternoon session, taking support from IT industry body Nasscom's statement that the new rules for operating drones in the country will usher in new growth opportunities and enable startups and SMEs to create innovative use cases and applications in various sectors like e-commerce, mining and emergency response. Domestic sentiments were positive, as Reserve Bank extended the scheme for encouraging deployment of Point of Sale (PoS) infrastructure to street vendors covered under the PM SVANidhi programme in tier 1 and 2 centres. Meanwhile, Governor Shaktikanta Das states that the Reserve Bank of India (RBI) won't surprise the market with a sudden rate hike and all monetary policy actions would be carefully calibrated. The current inflation trajectory looked transitory. In its August policy review, the RBI kept the key rates unchanged and said the policy stance would remain accommodative as long as was necessary. Finally, the BSE Sensex rose 175.62 points or 0.31% to 56,124.72, while the CNX Nifty was up by 68.30 points or 0.41% to 16,705.20.   

The US markets ended higher on Friday with notable gains, reacting to Federal Reserve Chairman Jerome Powell's remarks at the Jackson Hole symposium. Jerome Powell said the central bank is likely to begin tapering some of its easy-money policies before the end of the year. However, he added that he still feels there's much ground to cover before rate hikes. Powell said the economy has reached a point where it no longer needs as much policy support, indicating the Fed might start reducing the amount of bonds it purchases each month before the end of 2021, provided the economy continues to progress. He added that while inflation is solidly around the Fed's 2% target rate, we have much ground to cover to reach maximum employment, which is the second prong of the central bank's dual mandate and necessary before rate hikes happen. On the employment front, Powell noted that the delta variant of Covid 'presents a near-term risk' to getting back to full employment. However, he said the prospects are good for continued progress toward maximum employment. On economic front, data showed personal income in the U.S. increased by 1.1 percent in July, after a revised 0.2 percent advance in June. Meanwhile, personal spending rose by 0.3 percent in July, after rising by an upwardly revised 1.1 percent in June. Wholesale inventories in the U.S. increased by 0.6 percent month-over-month to $722 billion in July, cooling from an upwardly revised 1.2 percent rise in June, according to a preliminary estimate. The personal consumption expenditure price index in the U.S.rose 0.4 perent in July, following a 0.5 percent increase a month earlier. The University of Michigan's consumer sentiment for the US was revised to 70.3 in August, from a preliminary reading of 70.2.

Crude oil futures ended sharply higher on Friday amid possible near-term disruptions in oil and natural gas operations in the Gulf of Mexico region due to the impact of Hurricane Ida. According to reports, the hurricane will likely make landfall along the U.S. northern Gulf Coast this weekend. Meanwhile, a report from Baker Hughes shows the number of active U.S. rigs drilling for oil increased by five to 410 this week, marking the fourth weekly increase in a row. The total active U.S. rig count climbed by five to 508. Crude oil futures for October rose $1.32 or about 2 percent to settle $68.74 barrel on the New York Mercantile Exchange. October Brent crude added $1.40 or about 2% percent to settle at $71.59 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly stronger against dollar on Friday due to fresh selling of the American currency by banks and exporters. Weakness in the greenback overseas also supported the rupee. Sentiments were upbeat as Reserve Bank of India (RBI) has been working on a phased implementation strategy for a central bank digital currency (CBDC) and the pilot may be launched by the end of this year. The Reserve Bank of India may launch its first digital currency trial programs by December. Adding more optimism, private report stated that India and Australia are looking at announcing an early harvest trade deal by December. An early harvest agreement will be the way forward for an early conclusion of a bilateral Comprehensive Economic Cooperation Agreement (CECA) between both countries. On the global front; dollar steadied on Friday as investors awaited a highly anticipated speech by Federal Reserve Chair Jerome Powell. Finally, the rupee ended 73.69, stronger by 53 paise from its previous close of 74.22 on Thursday.

The FIIs as per Friday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 7121.23 crore against gross selling of Rs 9381.05 crore, while in the debt segment, the gross purchase was of Rs 245.43 crore with gross sales of Rs 310.14 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.62 crore against gross selling of Rs 5.36 crore.

The US markets ended higher on Friday after Federal Reserve Chair Jerome Powell indicated the US central bank could begin scaling back its bond buying program by year-end but did not give a firm timeline. Asian markets are trading in green on Monday after US Federal Reserve Chairman Jerome Powell struck a more dovish tone than some investors expected in long-awaited speech on Friday. Indian markets -- Sensex and Nifty ended at record closing highs Friday led by across the board gains amid mixed global cues. Today, the markets are likely to make optimistic start of new week tracking global peers. Traders will be taking encouragement as foreign direct investment (FDI) into the country rose by more than twofold to $17.57 billion during April-June this fiscal on account of measures such as policy reforms and ease of doing business. Some support will come as foreign portfolio investors (FPIs) pumped in a net of just Rs 986 crore in Indian equities during August, as cautiousness continued to persist among overseas investors. However, traders may be concerned as India recorded a spike of 43,381 new Covid-19 cases in the past 24 hours. The country also witnessed 527 deaths, taking the death toll to 438,387. So far, India has recorded 32,737,569 corona cases in total. There may be some cautiousness as India's foreign exchange reserves fell by $2.470 billion, during the week ended August 20. According to the Reserve Bank of India's (RBI) weekly statistical supplement, the reserves decreased to $616.895 billion from $619.365 billion reported for the week ended August 13. Traders may take note of report that Governor Shaktikanta Das has said the Reserve Bank of India (RBI) may consider changing its policy course after economic activity shows signs of durability and sustainability, but it would be done in manner so as not to surprise the markets. Meanwhile, the focus will shift to the Q1 GDP print for the financial year 2021-22 slated to be out on Tuesday, August 31. According to an SBI research report, the GDP is expected to grow at around 18.5 per cent in the first quarter of the current financial year. Metal stocks will in limelight as CRISIL Research projects the overall Indian steel industry's revenue to rise 50-60 per cent year on year in the current fiscal year (FY22), driven by 15-17 per cent growth in domestic demand and soaring realisations. There will be some reaction in agriculture industry stocks as agriculture ministry data released showed area sown to paddy has dipped 1.23 per cent at 388.56 lakh hectares so far in the 2021-22 kharif season due to deficit rains in some states. Coal Industry stocks will be in focus as India's coal import rose 50 per cent to 18.77 million tonnes (MT) in June this year, when compared to the shipments arrived in the same month of 2020. The action will return to the primary markets as two new issues -- Ami Organics and Vijaya Diagnostic -- are lined up to open on September 1.

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

Nifty Top volumes

• L&T has completed the hiring of more than 1,800 freshers through campus recruitment. 
• Hero MotoCorp has partnered with the district administration in Haridwar, Uttarakhand, to administer 10,000 doses of vaccines in a phased manner to the people in the city. 
• HDFC Bank has listed $1 billion AT-1 bonds on the IFSC exchanges at Gujarat International Finance Tec-City.   
• Maruti Suzuki India has commenced taking applications for the sixth round of its Mobility and Automobile Innovation Lab programme.