Profit booking which emerged in last leg of trade dragged benchmarks lower on Thursday. Markets made an optimistic start with Sensex breaching 50K mark for the first time ever as sentiments remained upbeat after report that the Department for Promotion of Industry and Internal Trade (DPIIT) has launched a regulatory compliance portal that will act as a bridge between citizens, industries and the government to minimize burdensome compliances. It will also act as a first-of-its-kind central online repository of all central and state-level compliances. Traders took note of Fitch Ratings' report that India's medium-term growth potential is at around 6.5% but weak implementation of reforms, combined with continued financial sector problems, could lower its potential. It said the revival of the reform agenda is among the Indian government's policy responses to the Covid pandemic shock. Also, Traders took note of private report stating that the India eyeing to start negotiations on an investment deal with the European Union simultaneously with a trade agreement in a renewed push to boost bilateral ties with the trade bloc. However, markets witnessed a sharp fall in last leg of trade which dragged both Sensex and Nifty lower as traders turned pessimistic amid reports of a fire in the Serum Institute of India plant in Pune. The selloff was so brutal that Sensex and Nifty lost their crucial 49,400 and 14,550 marks, respectively. But, key gauges fount some support near those levels and pared some of their losses in dying hour of trade after Officials have said the Covid vaccine production has not been affected by the fire and this is not the building where Covishield vaccine is being manufactured. The Serum Institute of India is manufacturing the Covishield vaccine developed by the Oxford University and AstraZeneca. Covishield is one of the two Covid-19 vaccines that have been granted emergency use approval in India. Finally, the BSE Sensex fell 167.36 points or 0.34% to 49,624.76, while the CNX Nifty was down by 54.35 points or 0.37% to 14,590.35.

The US markets ended mostly higher on Thursday optimism about ramped up efforts to combat the coronavirus under new President Joe Biden have also helped to prop up the markets. Biden has revealed new details of his plan to tackle the pandemic, which includes providing more state and local funding to accelerate the vaccine rollout and using the Defense Production Act to increase production of personal protective equipment. Traders also remained optimistic about more fiscal stimulus under Biden, who has called for a new $1.9 trillion relief package. However, upside remained capped as traders expressed some uncertainty about the near-term outlook for the markets following the run to record highs. On the economic data front, the Labor Department released a report showing a pullback in initial jobless claims in the week ended January 16th. The report said initial jobless claims fell to 900,000, a decrease of 26,000 from the previous week's revised level of 926,000. Street had expected jobless claims to drop to 910,000 from the 965,000 originally reported for the previous week. Even with the downward revision, the number of claims in the previous week represented the most since reaching 1.011 million in the week ended August 22nd.

Crude oil futures ended lower on Thursday after data from the American Petroleum Institute showed an increase in U.S. crude stockpiles last week. The American Petroleum Institute report showed an unexpected 2.6 million-barrel build in US commercial crude inventories in the week ended January 15, contrary to predictions for a fall of 1.2 million barrels. The weekly inventory data from US Energy Information Administration will be out on Friday, two days later than usual due to holiday on Monday for Martin Luther King Jr. Day and the presidential inauguration on Wednesday. Crude oil futures for March fell $0.18 or 0.3 percent to settle at $53.13 barrel on the New York Mercantile Exchange. March Brent crude lost $0.03 to settle at $ 56.05 a barrel on London's Intercontinental Exchange.

Indian rupee ended stronger against dollar on Thursday due to fresh selling of the American currency by banks and exporters. Sentiments were upbeat as Reserve Bank stated India's GDP is within the striking distance of attaining positive growth, observing that the letter V in the V-shaped recovery stands for vaccine. The Indian government launched the world's biggest vaccination drive on January 16 to protect people from COVID-19. Traders took note of private report stating that the India eyeing to start negotiations on an investment deal with the European Union simultaneously with a trade agreement in a renewed push to boost bilateral ties with the trade bloc. Also, strong gains in the domestic equity market added to the rupee gains. On the global front, euro ticked higher before a meeting of the European Central Bank on Thursday, with the dollar declining versus major peers as plans for a massive U.S. stimulus package fuelled market optimism and sapped demand for safe-haven currencies. Finally, the rupee ended at 72.99, 6 paise stronger from its previous close of 73.05 on Wednesday.

The FIIs as per Thursday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 7903.89 crore against gross selling of Rs 5409.34 crore, while in the debt segment, the gross purchase was of Rs 723.08 crore with gross sales of Rs 2742.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 24.86 crore against gross selling of Rs 17.68 crore.

The US markets ended higher on Thursday propelled by optimism about more pandemic relief under the Biden administration. Asian markets are trading mostly in red on Friday as investors assessed earnings, prospects for stimulus and escalating coronavirus cases. Indian markets ended in the red on Thursday after hitting record highs in intra-day deals mainly dragged by banking, metals and IT stocks. Today, the markets are likely to make weak start tracking their Asian peers. There will be some cautiousness as India recorded 13,701 fresh cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen to 10,625,420, while the caseload tally stands at 10,625,420. Globally, more than 98 million people have been infected by the virus. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. The five most affected states by total cases are Maharashtra (1,994,977), Karnataka (933,077), Andhra Pradesh (886,245), Kerala (857,380), and Tamil Nadu (831,866). However, some respite may come later in the day as in its latest assessment of the economy, the Reserve Bank of India indicated that the Indian economy has further recovered and estimates the Gross Domestic Product (GDP) to turn positive in the third quarter. Some support may come with a private report that even as India's hiring activities declined last year due to the coronavirus pandemic, there is a sudden increase in demand with about 53 per cent of companies saying they are planning to increase their headcounts in 2021. Traders may take note of report that the Reserve Bank of India (RBI) continued to remain a net buyer of the US currency in November after it bought USD 10.261 billion from the spot market. Meanwhile, Union Health Ministry said the number of healthcare workers who have received COVID-19 vaccine jabs in India till the evening of the sixth day of the nationwide immunisation drive has reached 9,99,065 as per provisional reports. There will be some reaction in logistics industry stocks with ICRA's report that pressure on earnings and credit metrics of logistics entities, especially the smaller, unorganised players, is expected to continue over the near-term. However, it said growth over the medium-term is expected to gain momentum. Agriculture sector stocks will be in focus as the government plans to expand area under cultivation for summer-crops by 50% from 3.4 million hectares in 2020 to 5.1 million hectares in 2021. Traders will also be eyeing some important earnings announcement including that of Reliance Industries.

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

Nifty Top volumes

• Axis Bank has received approval from Competition Commission of India for acquisition of stake in Max Life Insurance. 
• HDFC has entered into a share purchase agreement for sale of 47,75,241 equity shares of Re 1 each, representing 24.48% of the issued and paid-up share capital of Good Host. 
• Bharti Airtel's subsidiary -- Airtel Payments Bank has added third layer of authentication, Airtel Safe Pay, based on network intelligence to prevent online banking frauds for its customers. 
• SBI has executed two inter-bank short term money market transactions with pricing linked to secured overnight financing rate.