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Indian markets scaled fresh four-month closing peaks on Thursday led by gains in financial and IT shares. Today, markets are likely to get flat-to-positive start amid mixed global cues. Market participants may remain on sidelines as Dalal Street heads into a long weekend on account of the Independence Day holiday on Monday. Investors will be eyeing Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be out later in the day for more cues. There are expectations that headline retail inflation is likely to have cooled in July, led by lower food prices, with prices of certain key items posting a sequential fall. Traders may take encouragement with a private report that India will be the fastest growing major economy this year and the next despite headwinds from rising inflation, widening trade deficit and a declining rupee. It added that the 7 per cent decline in rupee value against the US dollar this year was not worrisome, and the government and RBI are confident of managing the situation. Some support may come as State Bank of India in a report said India’s inflation trajectory going forward is expected to be benign with headline retail inflation potentially printing at less than 5 per cent in March 2023. It added that CPI (consumer price index) numbers for March 23 could be even lower than 5 per cent, if July CPI numbers are closer to 6.5-6.6 per cent, a likely possibility. Also, S&P Global Ratings said the Indian economy can handle some erosion of its foreign exchange reserves as its external position is very strong. Traders may take note of commerce and industry ministry’s statement that India and the UK aim to conclude the free trade agreement by the end of October this year. Meanwhile, Finance Minister Nirmala Sitharaman said health and education are the main principles of a welfare state and no government in India ever denied them. Besides, companies like ONGC, Hindustan Aeronautics, and LIC will report their June quarter results (Q1FY23) later in the day.

The US markets ended mostly in red on Thursday as investors digested signs of cooling US inflation and hopes the Fed could slow interest rate hikes against warnings that the battle with rising prices was far from over. Asian markets are trading mixed on Friday following strong gains in the previous session as investors digested the US inflation report.

Back home, Indian equity benchmarks ended higher with gains of more than half percent on Thursday buoyed by intense buying in IT, financial and banking stocks amid a firm trend in global markets. Key gauges made gap-up opening and stayed in green for whole day, as traders took encouragement with a private report that India is likely to be the fastest-growing Asian economy in 2022-23. The report expects India’s gross domestic product growth to average 7 per cent during this period - the strongest among the largest economies - and contributing 28 per cent and 22 per cent to Asian and global growth, respectively. Foreign fund inflows also aided the domestic sentiments. Foreign institutional investors (FIIs) have net bought shares worth Rs 1,061.88 crore on August 10, as per provisional data available on the NSE. Traders remained optimistic in late afternoon deals, taking support from Reserve Bank of India (RBI) in its latest data has showed that bank credit rose 14.52 per cent to Rs 123.69 lakh crore and deposits increased 9.14 per cent to Rs 169.72 lakh crore in the fortnight ended July 29. Traders took note of report that the Centre has released two instalments of tax devolution totalling Rs 1.16 lakh crore to states. Meanwhile, India will start supplying petrol with 20 per cent ethanol at select petrol pumps from April next year and will ramp up supplies thereafter as it looks to cut oil import dependence and address environmental issues. Traders overlooked private report stated that Investments by private equity and venture capital funds into Indian entities fell by 69 per cent to $3 billion during July. The investments in July are the lowest for any month in a year, and lower than the $4.9 billion recorded across 118 deals in the preceding month of June. Finally, the BSE Sensex rose 515.31 points or 0.88% to 59,332.60 and the CNX Nifty was up by 124.25 points or 0.71% to 17,659.00. 

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