Indian equity benchmarks ended flat after a volatile session on Friday, halting a five-day winning run amid weak global cues. Benchmark indices started lower and traded in red for most part of the day, as traders got anxious with United Nations' report that India is forecast to grow at 6.5 per cent in fiscal year 2022, a decline from the 8.4 per cent GDP estimate in previous financial year, and while the country's economic recovery is on a solid path amid rapid vaccination progress, coal shortages and high oil prices could put the brakes on economic activity in the near term. Traders remained cautious with Niti Aayog Vice-Chairman Rajiv Kumar's statement that the country needs much more 'equitable' growth as inequality could lead to tensions in society. He further said the country's democracy will not permit the kind of K-shaped growth it has seen in the past, where different sections of the population have been growing at different paces. Benchmarks continued their lackluster trade in afternoon session, as the wholesale inflation across the country rose to 13.56 per cent in December. The high rate of inflation in December 2021 is primarily due to rise in prices of mineral oils, basic metals, crude petroleum & natural gas, chemicals and chemical products, food products, textile and paper and paper products etc as compared to the corresponding month of the previous year. Some anxiety remained among traders with a domestic rating agency ICRA's statement that the upcoming budget is unlikely to make any provision for recapitalisation of state-owned lenders, as over Rs 3.36 lakh crore has been spent on the banks in the last six years. However, key indices managed to trim most of their losses in late afternoon deals, as traders took some support with data showing that exports in December 2021 were $37.81 billion, as compared to $27.22 billion in December 2020, exhibiting a positive growth of 38.91 per cent. Traders took note of report that the FSDC sub-committee headed by Reserve Bank Governor Shaktikanta Das has reviewed the economic situation in the backdrop of the COVID-19 pandemic and resolved to keep a close watch on the unfolding developments with a view to ensure financial stability. Finally, the BSE Sensex fell 12.27 points or 0.02% to 61,223.03 and the CNX Nifty was down by 2.05 points or 0.01% to 18,255.75.

The US markets settled mostly in green on Friday amid financial shares struggled after earnings results. The Dow showed a notable move to the downside, the tech-heavy Nasdaq bounced off a three-month closing low. A steep drop by JPMorgan Chase (JPM) weighed on the Dow, with the financial giant tumbling by 6.2 percent despite reporting better than expected fourth quarter earnings. Citigroup (C) also moved lower after reporting a significant decrease in fourth quarter profits, while Wells Fargo (WFC) moved notable higher after reporting fourth quarter results that beat estimates on both the top and bottom lines. The overall volatility on Wall Street came as traders reacted to a slew of US economic data, including a Commerce Department report unexpectedly showing a steep drop in US retail sales in the month of December. The Commerce Department said retail sales tumbled by 1.9 percent in December after edging up by a revised 0.2 percent in November. The sharp pullback surprised market participants, who had expected retail sales to come in unchanged compared to the 0.3 percent growth originally reported for the previous month. Inflation concerns have also contributed to a bigger than expected drop in U.S. consumer sentiment in the month of January, according to preliminary data released by the University of Michigan. The report showed the consumer sentiment index fell to 68.8 in January from 70.6 in December. Street had expected the index to edge down to 70.0. The Federal Reserve also released a report unexpectedly showing a modest decrease in U.S. industrial production in the month of December. The Fed said industrial production edged down by 0.1 percent in December after climbing by an upwardly revised 0.7 percent in November. Street had expected industrial production to rise by 0.4 percent compared to the 0.5 percent increase originally reported for the previous month.

Crude oil futures ended higher on Friday, after previous session's pull back, as traders remain optimistic about the outlook for energy demand despite worldwide surge in coronavirus cases as a result of the Omicron variant. Indications of tight near-term supply amid supply disruptions in some regions also contributed to the notable increase in oil prices. Meanwhile, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, stuck to a plan to incrementally boost production, resisting pressure from the Biden administration and others to speed up increases. At the same time, some OPEC members have failed to meet boosted quotas. Benchmark crude oil futures for February delivery rose $1.70 or 2.1 percent to settle at $83.82 a barrel on the New York Mercantile Exchange. Brent crude for March delivery increased $1.59 or 1.9 percent to settle at $86.06 a barrel on London's Intercontinental Exchange.

Snapping its five-day gaining streak, Indian rupee depreciated against dollar on Friday due to demand for American currency from banks and importers. Besides, volatility in local equity market also hit the rupee sentiment. Sentiments were fragile as wholesale inflation across the country rose to 13.56 per cent in December. The high rate of inflation in December 2021 is primarily due to rise in prices of mineral oils, basic metals, crude petroleum & natural gas, chemicals and chemical products, food products, textile and paper and paper products etc as compared to the corresponding month of the previous year. On the global front, dollar fell for a fourth consecutive day on Friday to its lowest in more than two months as investors took the view that most of the recent hawkishness from the U.S. central bank has already been priced in. Finally, the rupee ended 74.15, weaker by 25 paise from its previous close of 73.90 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 7477.91 crore against gross selling of Rs 8848.77 crore, while in the debt segment, the gross purchase was of Rs 1009.24 crore with gross sales of Rs 380.72 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.56 crore against gross selling of Rs 6.40 crore.

The US markets ended mostly higher on Friday with a big drag from financial stocks as investors were disappointed by fourth quarter results from big U.S. banks, which cast a shadow over the earnings season kick-off. Asian markets are trading mixed on Monday ahead of US earnings season and a slew of Chinese economic data. Indian markets snapped 5 sessions' winning run on Friday to end flat as gains in heavyweights like Infosys and TCS helped the market avoid deeper losses. Today, the markets are likely to make negative start amid weakness in global markets. There will be some cautiousness as former World Bank Chief Economist Kaushik Basu said that India's overall macroeconomic situation is in a recovery mode but the growth is concentrated at the top end, which is a worrying trend. Also, rising coronavirus cases may dent sentiments in the markets. India recorded a spike of 257,063 new Covid-19 cases in the past 24 hours, according to Worldometer. The country also witnessed 388 deaths, taking the death toll to 486,482. Besides, Fitch Ratings said the rising COVID cases may delay recovery in MSME and microfinance lending, and add to asset quality risks of non-banking financial institutions. However, some support may come later in the day as RBI data showed bank credit grew 9.16 per cent to Rs 116.83 lakh crore and deposits rose 10.28 per cent to Rs 162.41 lakh crore for the fortnight ended December 31, 2021. There will be some buzz in the IT stocks as Commerce and Industry Minister Piyush Goyal assured full government support to leaders of India's top IT companies in pushing the growth of the sector and taking services exports to $1 trillion in a decade. Auto stocks may in focus as according to a new Delhi government mandate, aggregators and delivery services would have to ensure that 10 per cent of all new two-wheelers and five per cent of all new four-wheelers are electric vehicles in the next three months. Further, six airbags have been made mandatory in all cars sold from October 1. Meanwhile, latest data by SIAM showed that passenger vehicle exports from India increased 46 per cent in the first nine months of the current fiscal year. There will be some reaction gold related stocks as data of the commerce ministry showed that India's gold imports, which has a bearing on the country's current account deficit (CAD), more than doubled to $38 billion during April-December this fiscal on account of higher demand. The imports stood at $16.78 billion in April-December 2020. There will be lots of important earnings announcements too, to keep the markets in action.

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

Nifty Top volumes

• SBI has raised $300 million from Regulation S Formosa bonds offering a coupon of 2.49 per cent.  
• Tata Motors has reported a 2 per cent year-on-year increase at 2,85,445 units in group global wholesales, Jaguar Land Rover, for the third quarter of FY22. 
• Hero MotoCorp has expanded its operations and commenced retail sales at a newly opened flagship store in the country's capital city San Salvador. 
• HCL Technologies has signed a definitive agreement for the acquisition of Starschema, a leading provider of data engineering services, based in Budapest, Hungary.