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Indian equity benchmarks ended a choppy session marginally lower on Friday, extending losses to a second straight day. The benchmark indices started on a muted note and remained volatile throughout the day with a bearish ton. Traders were cautious amid a private report stating that the Finance Ministry’s internal projections for what real gross domestic growth in FY23 could be, is lower than the 8-8.5 percent given out in the 2021-22 Economic Survey. Some pessimism also came with IMF Managing Director Kristalina Georgieva’s statement that it was 'too early' to say if the world was facing a period of sustained inflation, but warned that failure to make economies more resilient to future shocks could lead to big problems. Traders took note of a private report that the Monetary Policy Committee (MPC) may go for a hike of up to 0.25 per cent in the reverse repo rate at which the RBI absorbs excess liquidity and leave the repo rate at which it lends, to narrow the policy rate corridor.

However, losses remain capped as traders got some support with CBDT Chairman J B Mohapatra said direct tax collections are expected to breach the revised target of Rs 12.50 lakh crore and set an all-time high and 'historic' record by the end of this financial year in March. Some support also came in as economic think-tank NCAER said the business confidence has remained buoyant in the third quarter of the current financial year, though the pace of rise was moderated by a spurt in the number of COVID-19 cases in December 2021. Adding to the optimism, Commerce and Industries Minister Piyush Goyal said promoting exports through subsidies has not really given the desired results, but the government's RoDTEP scheme is helping grow exports which is expected to reach a record $400 billion this year.

On the global front, European markets were trading mostly in red amid lingering worries over inflation and looming central bank rate hikes. The downside remained capped after data showed Germany's factory orders grew more than expected in December, driven by robust domestic demand. German factory orders grew 2.8 percent on a monthly basis, but slower than the 3.6 percent expansion seen in November. Asian markets ended mostly higher on Friday, as investors also awaited the latest U.S. jobs report for January due out later in the day for clues on the rate outlook. The U.S. central bank is expected to deliver its first interest rate hike in March, aiming to tamp down inflation that has surged to 40-year highs.

Back home, on the sectoral front, sugar industry’s stocks were in focus as industry body ISMA said the country's sugar production is estimated to have increased by 5.64 percent to 18.70 million tonnes during the October-January period of the ongoing marketing year, 2021-22, from over the year-ago period. Tyre industry’s stocks also were in action as the All India Tyres Federation sought removal of anti-dumping duty on tyres and urged the government to lift import restrictions imposed after the Competition Commission of India's (CCI) order on domestic tyre manufacturers for indulging in price rigging and cartelisation.

Finally, the BSE Sensex fell 143.20 points or 0.24% to 58,644.82 and the CNX Nifty was down by 43.90 points or 0.25% to 17,516.30.  

The BSE Sensex touched high and low of 58,943.62 and 58,446.95, respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.68%, while Small cap index was down by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 1.28%, Basic Materials up by 0.51%, Utilities up by 0.37%, Power up by 0.29% and FMCG up by 0.08%, while Realty down by 2.83%, Auto down by 1.01%, Consumer discretionary down by 0.81%, Energy down by 0.68% and banking down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.21%, Asian Paints up by 1.06%, Tata Steel up by 0.90%, Ultratech Cement up by 0.68% and Larsen & Toubro up by 0.67%. On the flip side, SBI down by 1.83%, Mahindra & Mahindra down by 1.73%, NTPC down by 1.72%, Kotak Mahindra Bank down by 1.32% and Wipro down by 1.12% were the top losers.

Meanwhile, Economic think-tank NCAER in its latest report stated that the business confidence has remained buoyant in the third quarter of the current financial year (Q3FY22), though the pace of rise was moderated by a spurt in the number of COVID-19 cases in December 2021. It noted that business sentiments recovered in the October-December quarter of 2021–22 as compared to those prevailing in the July-September quarter. The NCAER-NSE Business Confidence Index (BCI) increased by 6 per cent on a quarter-on-quarter (q-o-q) basis and by 46.6 per cent on a year-on-year (y-o-y) basis. It said ‘as compared to the last quarter, there was a moderation in the pace of increase of the BCI. Business sentiments were affected in the last week of December as the number of COVID-19 cases went up and travel restrictions came into place’.

The upward movement in the BCI was driven by an improvement in sentiments for all the four components of the BCI, namely ‘overall economic conditions will improve in the next six months’, ‘financial position of firms will improve in the next six months’, ‘present investment climate is positive as compared with six months ago’ and ‘present capacity utilisation is close to or above the optimal level’. It added ‘sentiments were broadly buoyant across sectors with the exception of the consumer non-durables sector, where the BCI fell by 2 per cent in 2021–22:Q3 on a quarter-on-quarter basis. The plateauing of business sentiments in this key sector lends credence to the K-shaped recovery of various stakeholders’.

The variation in business sentiments across sectors narrowed in the third quarter of 2021–22 as compared to that in previous quarter. The NCAER-NSE Political Confidence Index (PCI) remained virtually unchanged between the second and third quarter at 107.8. However, there was a 43.1 per cent year-on-year growth in the PCI in the third quarter of 2021-22. The shares of positive responses rose for three components of the PCI - ‘managing the exchange rate, ‘managing inflation’, and ‘managing a conducive political climate’. It fell for three of the components - ‘pushing economic reforms forward’, ‘external trade negotiations’ and ‘managing government finances’, and remained unchanged for the remaining two components - ‘managing overall economic growth’ and ‘managing unemployment’.

The CNX Nifty traded in a range of 17,617.80 and 17,462.55 and there was 16 stocks advancing against 34 stocks declining on the index.  

The top gainers on Nifty were Hindalco up by 2.45%, ONGC up by 1.28%, Sun Pharma up by 1.12%, Asian Paints up by 1.05% and Divi's Lab up by 0.95%. On the flip side, Hero MotoCorp down by 2.25%, SBI down by 1.97%, Mahindra & Mahindra down by 1.92%, NTPC down by 1.79% and Eicher Motors down by 1.57% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 34.76 points or 0.5% to 6,970.87 and Germany’s DAX decreased 180.84 points or 1.18% to 15,187.63, while UK’s FTSE 100 increased 16.29 points or 0.22% to 7,545.13.

Asian markets ended mostly higher on Friday, despite a tech-led sell-off on Wall Street overnight following disappointing earnings from Facebook's parent company Meta Platforms Inc. Meanwhile investors are waiting for the US non-farm payroll data due later in the day for clues on the rate outlook. US Fed is expected to deliver its first interest rate hike in March to cool inflation that has surged to 40-year highs. Hong Kong shares rose sharply as investors returned from a three-day Lunar New Year holiday, while Chinese markets remained closed for Lunar New Year break. Japanese shares settled higher to notch their first weekly gain in five. Seoul shares rose sharply due to positive sentiments among tech companies and as investors ignored data showing that consumer prices in the country stayed well above the Bank of Korea's target in January.