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Indian equity benchmarks extended their winning run to a third day and settled with gains of over a percent on Friday following buying in index majors Tata Steel, Sun Pharma and Bajaj Finserv. Key indices made gap-up opening, as traders took encouragement with the commerce ministry stating that the manufacturing sector attracted foreign direct investments worth $21.34 billion in 2021-22, an increase of 76 per cent year-on-year. Traders took some support with RBI data showing that Bank credit rose by 12.89 per cent to Rs 122.81 lakh crore and deposits by 8.35 per cent to Rs 168.09 lakh crore in the fortnight ended July 15, 2022. Besides, exchange data showed foreign institutional investors (FIIs) became net buyers in the capital markets as they bought shares worth Rs 1,637.69 crore on Thursday.

However, markets erased some of the intraday gains in morning deals amid a mixed trend in the global equity markets. But, indices gained traction in final minutes of trade to close around the day’s high as sentiments got up-beat with Minister of State in the Ministry of Commerce and Industry Som Parkash’s statement that India has received its highest ever FDI inflow of Rs 6,31,050 crores in Financial Year 2021-22. Further, FDI Equity inflow in Manufacturing sectors has increased to Rs 1,58,332 crore in Financial Year 2021-22 from Rs 89,766 crore (FY 2020-21), which is an increase of 76%. Traders took note of Power Minister R K Singh’s statement that power deficit came down from 2 per cent in April to 0.4 per cent in May and 0.6 per cent in June despite significant rise in demand of electricity.

On the global front, European markets were trading higher amidst data that showed the U.S. economy contracting by 0.90 percent in the second quarter that triggered both fears of a recession as a well as hopes of a slowdown in the Fed's rate hiking spree.  Some support also came with data showed second quarter GDP in France growing at 0.5 percent, versus expectations of 0.2 percent growth and the 0.2 percent contraction in the previous period. Asian markets settled almost lower on Friday as fresh concerns over economic growth in China eclipsed positive sentiments triggered by the earnings season as well as potential pause or slowdown by the Fed.

Back home, sugar stocks were in focus with report that the Centre is expected to allow an additional 1.2 million tonnes (MT) of sugar exports in the 2021-22 season, which will end in September, over and above the 10 MT already fixed, due to higher-than-anticipated domestic production. Auto industry stocks were in limelight with a private report that passenger vehicle sales are expected to be robust in July, driven by a large order book and production ramp-up, while commercial vehicle volumes may remain in an uptrend.

Finally, the BSE Sensex rose 712.46 points or 1.25% to 57,570.25 and the CNX Nifty was up by 228.65 points or 1.35% to 17,158.25. 

The BSE Sensex touched high and low of 57,619.27 and 57,104.81, respectively. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.01%, while Small cap index was up by 1.38%.

The top gaining sectoral indices on the BSE were Metal up by 4.59%, Energy up by 2.41%, Basic Materials up by 2.30%, Oil & Gas up by 2.21% and IT up by 1.71%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 7.27%, Sun Pharma up by 5.45%, Bajaj Finserv up by 2.64%, Indusind Bank up by 2.51% and Asian Paints up by 2.38%. On the flip side, Dr. Reddy's Lab down by 3.96%, Kotak Mahindra Bank down by 0.97%, SBI down by 0.77%, ITC down by 0.13% and Axis Bank down by 0.06% were the top losers.

Meanwhile, the commerce ministry has said that the manufacturing sector attracted foreign direct investments (FDI) worth $21.34 billion in 2021-22, an increase of 76 per cent year-on-year, as compared to $12.09 billion in 2020-21. It said the government has implemented several reforms under the FDI policy regime across sectors such as insurance, defence, telecom, financial services, pharmaceuticals, retail trading, and e-commerce.

Singapore (27.01 per cent) and the US (17.94 per cent) have emerged as the top two investors during 2021-22 in India. These were followed by Mauritius (15.98 per cent), the Netherlands (7.86 per cent) and Switzerland (7.31 per cent).

Despite the ongoing pandemic and global developments, India received the highest annual FDI inflows of $84,835 million in FY 21-22 overtaking last year’s FDI by $2.87 billion. Earlier, FDI inflows increased from $74,391 million in FY 19-20 to $81,973 million in FY 20-21. Top five sates receiving highest FDI in 2021-22 are Karnataka (37.55 per cent), Maharashtra (26.26 per cent), Delhi (13.93 per cent), Tamil Nadu (5.10 per cent) and Haryana (4.76 per cent).

The CNX Nifty traded in a range of 17,172.80 and 17,018.15. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 8.61%, Tata Steel up by 7.42%, Hindalco up by 6.01%, Sun Pharma up by 5.45% and Coal India up by 4.51%. On the flip side, Dr. Reddy's Lab down by 3.97%, SBI down by 0.90%, Kotak Mahindra Bank down by 0.79%, Divi's Lab down by 0.59% and Axis Bank down by 0.19% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 43.53 points or 0.59% to 7,388.78, France’s CAC increased 87.97 points or 1.39% to 6,427.18 and Germany’s DAX increased 151.13 points or 1.14% to 13,433.24.

Asian markets settled almost lower on Friday, despite decent gains on Wall Street overnight on expectations of a softening in the US Federal Reserve's interest rate hikes. Chinese shares declined after Chinese leaders acknowledged that the official 5.5 percent growth target for this year won’t be met, while Investors are cautiously focused on regional tensions over China’s stance on Taiwan after President Joe Biden and China’s Xi Jinping spoke for more than two hours on Thursday. Hong Kong shares dropped as technology stocks and real estate stocks came under pressure. Hang Seng heavyweights Alibaba and Meituan fell more than 5% each. Moreover, Japanese shares closed slightly lower with the Japanese yen strengthened sharply against the US dollar as central bank policy in Japan diverged from the US Fed’s.

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