Indian equity benchmarks ended modestly higher on Friday led by gains in Telecom, Basic Materials and TECK stocks. Key gauges made positive start and stayed in green for most part of the day, as exchange data showed foreign institutional investors (FIIs) remained net buyers in the capital markets as they bought shares worth Rs 1,474.77 crore on Thursday. Buying further crept in after the Reserve Bank of India (RBI) raised the benchmark lending rate by 50 basis points to 5.40 per cent to tame inflation. It has also retained its FY23 gross domestic product (GDP) growth forecast at 7.2%. RBI Governor said that FPIs after remaining in exit mode in first quarter have turned positive in July. Besides, the RBI retained its retail inflation forecast for current fiscal year at 6.7 per cent amid geopolitical developments and higher global commodity prices, hoping inflationary pressures to ease further. Some optimism also came with private report stated that upgrading labour laws, simplifying taxation and creating a stable tariff environment are imperatives to facilitate a larger trade between India and the world. However, key indices trimmed most of their gains in late afternoon trade, as traders remained cautious after the report by the SBI Research Ecowrap stating that India's fiscal deficit in the current financial year is expected to come around 6.5 per cent, as against the budget estimate of 6.4 per cent. Some concern also came after the price of cooking gas piped to household kitchens in the national capital and adjoining cities was hiked by Rs 2.63 per unit on Friday, the second increase in rates in less than two weeks. Meanwhile, Commerce and industry minister Piyush Goyal is likely to meet export promotion councils on Friday to discuss the country's export performance, targets and various trade agreements India is currently negotiating. Finally, the BSE Sensex rose 89.13 points or 0.15% to 58,387.93 and the CNX Nifty was up by 15.50 points or 0.09% to 17,397.50.

The US markets closed the volatile session mostly lower on Friday as traders reacted to the Labor Department's closely watched monthly jobs report. The report showed employment in the U.S. jumped by much more than expected in the month of July, leading to concerns about the outlook for interest rates. The report showed non-farm payroll employment spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June. Street had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month. With the stronger than expected job growth, the unemployment rate unexpectedly edged down to 3.5 percent July from 3.6 percent in June. The unemployment rate was expected to remain unchanged. On the sectoral front, oil-related stocks saw significant strength regaining some ground following recent weakness. Reflecting the strength in the sector, the NYSE Arca Oil Index and the Philadelphia Oil Service Index surged by 2.2 percent and 2.1 percent, respectively. Considerable strength was also visible among steel stocks, as reflected by the 2 jump by the NYSE Arca Steel Index. Natural gas and banking stocks also saw notable strength on the day, while tobacco and semiconductor stocks moved to the downside.  

Crude oil futures ended higher on Friday amid data showing a bigger than expected addition in U.S. jobs in the month of July. Data released by the Labor Department showed non-farm payroll employment in the U.S. spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June. Street had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month. A report from Baker Hughes showed the oil rig count dropped by seven this week to 598. Compared to the level a year ago, oil rigs are up by 211. Benchmark crude oil futures for September delivery rose $0.47 or about 0.5 percent to settle at $89.01 a barrel on the New York Mercantile Exchange. Brent crude for October delivery added $0.80 or 0.9 percent to settle at $94.92 a barrel on London's Intercontinental Exchange.

Erasing previous session drubbing, Indian rupee ended significantly higher against dollar on Friday after the Reserve Bank hiked interest rates by 50 basis points in an effort to cool stubbornly high inflation and defend the rupee. RBI decided to hike the repo to 5.4 per cent, crossing the pre-pandemic level of 5.15 per cent. MPC decided to focus on withdrawal of accommodation to keep inflation within target while supporting growth. Further, RBI Governor Das said that India's foreign exchange reserve still strong, and are the 4th highest globally. On the global front, dollar edged higher on Friday, attempting to recoup some losses after its sharpest daily drop in more than two weeks, as traders turned their attention to U.S. jobs data for further clues about the strength of the economy. Finally, the rupee ended at 79.24 (provisional), stronger by 16 paisa from its previous close of 79.40 on Thursday.

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 8904.72 crore against gross selling of Rs 7176.60 crore, while in the debt segment, the gross purchase was of Rs 463.72 crore against gross selling of Rs 75.90 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.85 crore against gross selling of Rs 12.17 crore.

The US markets closed mostly lower on Friday, weighed down by Tesla and other technology-related stocks after a solid jobs report torpedoed recent optimism that the Federal Reserve might let up its aggressive campaign to reign in decades-high inflation. Asian markets are trading mostly in red on Monday as Treasury yields climbed amid expectations of further aggressive Federal Reserve interest-rate hikes to tackle elevated inflation. Indian benchmarks ended marginally positive on Friday after the RBI raised the key policy rate by 50 bps. Today, the indices are likely to start holiday shortened week in red amid weak global cues. Markets will remain closed on Tuesday for Muharram. Investors will be eyeing macro-economic data -- CPI and IIP -- to be out later in the week that is on August 12. However, some support may come later in the day as Sebi constituted an expert group of foreign portfolio investors (FPIs) to boost overseas flows into the country. FIIs net bought worth Rs. 1605.81 crore of shares on August 5. Traders may take note of Reserve Bank Governor Shaktikanta Das' statement that India is unlikely to be impacted by any adverse developments in Taiwan. The Governor said Taiwan accounts for only 0.7 per cent of India's overall trade and the capital flows from the island are also not very high. Meanwhile, market regulator Sebi has come up with a new framework that will prevent company insiders from dealing in shares during the closure of the trading window. Auto stocks will be in limelight as automobile dealer's body FADA President Vinkesh Gulati said it expect the festive season this year to be the best in terms of passenger vehicle sales on the back of new launches and improved production activity.  There will be some buzz in sugar industry stocks as the government relaxed the quantitative restriction of 10 million tonnes on sugar exports and allowed shipments of an additional 1.2 million tonnes in the current marketing year ending September. Aviation industry stocks will be in focus as Union minister Jyotiraditya Scindia said The country's civil aviation sector is poised for a phenomenal and healthy growth in terms of passengers, aircraft and airports, with the number of air travellers projected to touch 40 crore by 2027. There will be some reaction in travel and tourism industry stocks with a private report that outbound trips from India will surpass $42 billion by 2024 and the government could bring about certain policy changes to boost this growing market. Last batch of India Inc's June quarter earnings will also guide markets, with companies like Bharti Airtel, Adani Ports, and Power Grid will report their June quarter results (Q1FY22) later in the day.

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

Nifty Top volumes

• NTPC has started commercial operation of fifth part capacity of 48.8 MW out of 296 MW Fatehgarh Solar PV Project at Jaisalmer, Rajasthan. 
• State Bank of India has sold 97,500 equity shares of Rs 10 each of HDFC Venture Capital representing 19.50% of its paid-up equity share capital to HDFC. 
• M&M has reported consolidated net profit of Rs 2,360.70 crore for Q1FY23 as against net loss of Rs 331.74 crore for the same quarter in the previous year. 
• Cipla's wholly owned subsidiary in UK -- Cipla (EU) has agreed to acquire an additional 19.16% stake in Cipla Maroc SA, joint venture and subsidiary of Cipla EU in Morocco.