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Indian markets gave up early gains to end on a flat note Friday, tracking weak cues from Asia and Europe. Today, the start of new week as well as month is likely to be firm tracking Asian peers. Investors will be closely watching the Reserve Bank of India’s Monetary Policy Committee meeting scheduled for later this week. Also, the Manufacturing PMI is slated to be out later in the day. Traders will be taking encouragement as the goods and services tax (GST) collection recovered to a three-month high in July, exceeding the Rs 1.1 trillion-mark, as economic activity resumed after most states eased Covid-19 restrictions. Some support will come as the government data showed that the output of eight core sectors grew 8.9 per cent in June, mainly due to a low base effect and uptick in production of natural gas, steel, coal and electricity. The eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity had contracted by 12.4 per cent in June 2020 due to the lockdown restrictions imposed to control the spread of coronavirus infections. However, there may be some cautiousness as foreign portfolio investors (FPIs) pulled out a net Rs 6,105 crore from the Indian capital markets so far in the ongoing financial year amid the pandemic and resultant restrictions in many parts of the country. Meanwhile, data released by the Controller General of Accounts (CGA) showed that the central government's fiscal deficit stood at Rs 2.74 trillion or 18.2 per cent of the full year's Budget estimate at the end of June. The fiscal deficit at the end of June 2020 was 83.2 per cent of the Budget Estimates (BE) of 2020-2 at Rs 6.62 trillion, after a fall in tax receipts due to pandemic lockdown that led to the worst recession in seven decades. There will be some buzz in the power stocks with power ministry data showing that India's power consumption grew nearly 12 per cent in July to 125.51 billion units (BU) and returned to pre-pandemic level mainly due to easing of lockdown curbs and delayed monsoon. Auto stocks will be in limelight reacting to their monthly sales numbers.  There will be some reaction in insurance industry stocks as the government said there has been no noticeable change in insurance coverage in the country during the COVID-19 pandemic. IPO rush continues for domestic investors with four fresh offerings opening for subscription this week. Windlas Biotech, Krsnaa Diagnostics, Exxaro Tiles, and Devyani Internation will all open for subscription on August 4.

The US markets ended in red on Friday as Amazon.com shares dropped after the company forecast lower sales growth. Asian markets are trading mostly in green on Monday as upbeat economic data in the United States and Europe and solid corporate earnings put a floor under their markets, even though Beijing's regulatory crackdown fans fears about China's economy.

Back home, Indian equity benchmarks trimmed all gains ahead of the closing bell on Friday to end the day flat with negative bias, tracking losses in Metal, Energy and Banking stocks. Benchmarks made positive start and managed to keep heads in green terrain, as traders took some support with India Ratings and Research’s statement that outbound shipments from India, which have been languishing for quite some time, can benefit from the favourable trade growth outlook of 2021 and consolidate further from the level achieved in the first quarter of this fiscal. Some optimism also came in as Chief Economic Advisor K V Subramanian said headline inflation will come down under the 6 percent mark in July itself but will stay at an elevated level of over 5 percent for some time. Sentiments remained positive with Union Housing and Urban Affairs Ministry Secretary Durga Shanker Mishra’s statement that the real estate sector which has been stressed for quite some time now has started showing signs of improvement since the first quarter of the current fiscal (Q1FY22) and its contribution to the country's Gross domestic product (GDP) is expected to reach 10 percent by 2025 from the current 7 percent. Markets added some more points in late afternoon session taking support from private report stated that the easing of restrictions on economic activity coupled with the increasing focus on ramping up operations and sales by businesses is having a positive impact on the hiring of freshers. However, key indices erased gains in the last 30 minutes of trade taking cues from weak European markets. Some concern also came as 3 southern states report spike in new infections. Kerala reported more than 22,000 fresh Covid-19 cases for the third day straight: the spike prompting the state to announce a weekend lockdown. Karnataka and Tamil Nadu recorded a rise in new infections on Thursday as well, taking India’s daily case count to nearly 45,000, the highest in 22 days. Meanwhile, Parliament informed that around 1.09 crore MSME borrowers have been provided with guarantee support of Rs 1.65 lakh crore under Emergency Credit Line Guarantee Scheme (ECLGS). Finally, the BSE Sensex fell 66.23 points or 0.13% to 52,586.84, while the CNX Nifty was down by 15.40 points or 0.10% to 15,763.05.

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