Indian equity benchmarks ended higher with gains of more than half percent on Thursday buoyed by intense buying in IT, financial and banking stocks amid a firm trend in global markets. Key gauges made gap-up opening and stayed in green for whole day, as traders took encouragement with a private report that India is likely to be the fastest-growing Asian economy in 2022-23. The report expects India's gross domestic product growth to average 7 per cent during this period - the strongest among the largest economies - and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. Foreign fund inflows also aided the domestic sentiments. Foreign institutional investors (FIIs) have net bought shares worth Rs 1,061.88 crore on August 10, as per provisional data available on the NSE. Traders remained optimistic in late afternoon deals, taking support from Reserve Bank of India (RBI) in its latest data has showed that bank credit rose 14.52 per cent to Rs 123.69 lakh crore and deposits increased 9.14 per cent to Rs 169.72 lakh crore in the fortnight ended July 29. Traders took note of report that the Centre has released two instalments of tax devolution totalling Rs 1.16 lakh crore to states. Meanwhile, India will start supplying petrol with 20 per cent ethanol at select petrol pumps from April next year and will ramp up supplies thereafter as it looks to cut oil import dependence and address environmental issues. Traders overlooked private report stated that Investments by private equity and venture capital funds into Indian entities fell by 69 per cent to $3 billion during July. The investments in July are the lowest for any month in a year, and lower than the $4.9 billion recorded across 118 deals in the preceding month of June. Finally, the BSE Sensex rose 515.31 points or 0.88% to 59,332.60 and the CNX Nifty was up by 124.25 points or 0.71% to 17,659.00.

The US markets ended mostly in red on Thursday on account of profit booking after gaining in the previous session. Some cautiousness prevailed in the markets amid first-time claims for US unemployment benefits saw another modest increase in the week ended August 6th, according to a report released by the Labor Department. The report showed initial jobless claims rose to 262,000, an increase of 14,000 from the previous week's revised level of 248,000. Street had expected jobless claims to inch up to 263,000 from the 260,000 originally reported for the previous week. With the increase, jobless claims reached their highest level since hitting 265,000 in the week ended November 13, 2021. However, downside remained capped as the Labor Department released a report showing an unexpected decrease in producer prices in the month of July. The Labor Department said its producer price index for final demand fell by 0.5 percent in July after surging by a revised 1.0 percent in June. The decrease marked the first drop in producer prices since April 2020. The pullback came as a surprise to Participants, who had expected producer prices to edge up by 0.2 percent compared to the 1.1 percent jump originally reported for the previous month. The report also showed the annual rate of producer price growth slowed to 9.8 percent in July from 11.3 percent in June. Street had expected the annual rate of growth to slow to 10.4 percent. On the sectoral front, Biotechnology stocks came under pressure over the course of the session, dragging the NYSE Arca Biotechnology Index down by 1.5 percent. Considerable weakness also emerged among gold stocks, as reflected by the 1.4 percent drop by the NYSE Arca Gold Bugs Index. The weakness in the sector came as the price of gold for December delivery fell $6.50 to $1,807.20 an ounce.  

Crude oil futures ended higher on Thursday, magnifying their previous session's gains, amid rising hopes about energy demand after the International Energy Agency (IEA) lifted its demand outlook.  The IEA said in its monthly report that soaring oil use for power generation in Europe and the Middle East will boost crude consumption for the rest of the year. The IEA also said that Russia's oil output will likely fall roughly 20 percent by the start of next year as a European Union import ban comes into force. Further, the dollar's weakness following the soft inflation data contributed as well to the rise in oil prices. Benchmark crude oil futures for September delivery rose $2.41 or 2.6 percent to settle at $94.34 a barrel on the New York Mercantile Exchange. Brent crude for October delivery surged $2.20 or 2.3 percent to settle at $99.60 a barrel on London's Intercontinental Exchange.

Rupee ended considerably weaker against dollar on Thursday on account of continued dollar demand from importers and banks. Sentiments were fragile as Investments by private equity and venture capital funds into Indian entities fell by 69 per cent to $3 billion during July. The investments in July are the lowest for any month in a year, and lower than the $4.9 billion recorded across 118 deals in the preceding month of June. Traders were also cautious ahead of key domestic macroeconomic data points like index of industrial production (IIP), consumer price index (CPI) and trade balance numbers due on August 12 for further cues. On the global front, dollar lost further ground versus other major currencies on Thursday, after traders reined in bets on an aggressive interest rate hike by the Federal Reserve after softer-than-expected U.S. inflation data the previous day. Finally, the rupee ended at 79.94 (provisional), weaker by 69 paisa from its previous close of 79.25 on Wednesday.

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 10705.74 crore against gross selling of Rs 8250.75 crore, while in the debt segment, the gross purchase was of Rs 893.80 crore against gross selling of Rs 182.19 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.47 crore against gross selling of Rs 12.63 crore.

The US markets ended mostly in red on Thursday as investors digested signs of cooling US inflation and hopes the Fed could slow interest rate hikes against warnings that the battle with rising prices was far from over. Asian markets are trading mixed on Friday following strong gains in the previous session as investors digested the US inflation report. Indian markets scaled fresh four-month closing peaks on Thursday led by gains in financial and IT shares. Today, markets are likely to get flat-to-positive start amid mixed global cues. Market participants may remain on sidelines as Dalal Street heads into a long weekend on account of the Independence Day holiday on Monday. Investors will be eyeing Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be out later in the day for more cues. There are expectations that headline retail inflation is likely to have cooled in July, led by lower food prices, with prices of certain key items posting a sequential fall. Traders may take encouragement with a private report that India will be the fastest growing major economy this year and the next despite headwinds from rising inflation, widening trade deficit and a declining rupee. It added that the 7 per cent decline in rupee value against the US dollar this year was not worrisome, and the government and RBI are confident of managing the situation. Some support may come as State Bank of India in a report said India's inflation trajectory going forward is expected to be benign with headline retail inflation potentially printing at less than 5 per cent in March 2023. It added that CPI (consumer price index) numbers for March 23 could be even lower than 5 per cent, if July CPI numbers are closer to 6.5-6.6 per cent, a likely possibility. Also, S&P Global Ratings said the Indian economy can handle some erosion of its foreign exchange reserves as its external position is very strong. Traders may take note of commerce and industry ministry's statement that India and the UK aim to conclude the free trade agreement by the end of October this year. Meanwhile, Finance Minister Nirmala Sitharaman said health and education are the main principles of a welfare state and no government in India ever denied them. Besides, companies like ONGC, Hindustan Aeronautics, and LIC will report their June quarter results (Q1FY23) later in the day.

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

Nifty Top volumes

• Wipro has launched Wipro Shelde Australia, a sovereign cybersecurity offering for the Australian government and critical infrastructure industries, to help navigate the cyber threat landscape. 
• HPCL has partnered with Honda Motor to set up battery swapping stations for electric vehicles at the state-owned oil firm's petrol pumps. 
• TCS has partnered with Five Star Bank, a subsidiary of Financial Institutions, Inc.
• Coal India has reported around 3-fold jump in its consolidated net profit at Rs 8,834.22 crore for Q1FY23 as compared to Rs 3,174.15 crore for the same quarter in the previous year.