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Indian equity benchmarks trimmed most of the day's gains but managed to settle in the positive territory on Friday. Benchmarks made gap-up opening, as traders took encouragement with a report that the Income-tax department has collected around Rs 28 crore in taxes after about 1 lakh returns were filed by taxpayers under the newly introduced return filing form called ITR-U that was notified this year as part of the Budget 2022-23. Some optimism also came as S&P Global Ratings said that India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness. Buying further crept in as RBI data showed bank credit growth accelerated to 14.2 per cent in the quarter ended June 2022 from 6 per cent in the same period of the previous year.

However, key gauges erased gains in the dying hour of trade but managed to close in green, taking support from Services Export Promotion Council (SEPC) said that implementation of the proposed India-UK free trade agreement will help to boost the country's services exports, particularly from legal, accounting and auditing sectors. Adding some more relief, a private report stated that the Indian software-as-a-services (SaaS) market is expected to grow multi-fold by 2025, accounting for almost 7 to 10 per cent of the global market from 2 to 4 per cent currently. Foreign fund inflows into capital markets also supported the markets. According to exchange data, foreign institutional investors (FIIs) bought shares worth Rs 369.06 crore on Thursday. 

On the global front, European markets were trading mostly lower after a survey showed Germany's consumer confidence declined further to a new record low in September. Asian markets ended mostly higher after data showed the U.S. economy didn't contract by as much as previously thought during the spring. All eyes were on Fed Chair Powell's speech at the Jackson Hole Symposium due later in the day after several Fed official stressed the need to keep raising rates to combat inflation. Investors hope that his speech would shed light on plans for more interest rate hikes.

Finally, the BSE Sensex rose 59.15 points or 0.10% to 58,833.87 and the CNX Nifty was up by 36.45 points or 0.21% to 17,558.90.

The BSE Sensex touched high and low of 59,321.65 and 58,722.69, respectively. There were 21 stocks advancing against 9 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.40%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Metal up by 1.62%, Consumer Durables up by 1.50%, Utilities up by 1.31%, PSU up by 1.26% and Capital Goods up by 1.25%, while Realty down by 0.40%, FMCG down by 0.15% and Healthcare down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.80%, Titan Company up by 2.65%, Power Grid Corporation up by 1.92%, Kotak Mahindra Bank up by 1.71% and Larsen & Toubro up by 1.47%. On the flip side, Indusind Bank down by 1.92%, HDFC down by 1.20%, Asian Paints down by 1.18%, Bharti Airtel down by 1.02% and Dr. Reddy's Lab down by 0.60% were the top losers.

Meanwhile, expressing optimism over India’s credit worthiness, S&P Global Ratings said India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness. S&P Sovereign & International Public Finance Ratings Director Andrew Wood said the country has a strong external balance sheet and limited external debt, making debt servicing not so expensive. He said ‘the country has built up buffers against cyclical difficulties like those, which we are experiencing right now’. He said the rating agency did not expect near-term pressures to have a serious impact on India's credit worthiness.

He also said ‘we are expecting a strong level of GDP growth of 7.3% this fiscal’, and added that the rupee exchange rate movement against the U.S. dollar had been moderate. The rupee has depreciated about 7% against the U.S. currency this year but has performed better than its emerging market peers. He said India had ‘ample buffer’ in its foreign exchange reserves and the forex kitty is expected to recover to $600 billion by the end of this year. Forex reserve stood at $570.74 billion as of August 12. The U.S.-based agency has a 'BBB-' rating on India with a stable outlook.

S&P said it expected the Reserve Bank of India to raise interest rates further to 5.65% to tame inflation. Retail inflation remained above the RBI's comfort level for the seventh month in a row and was 6.71% in July. Wholesale price-based inflation remained in double-digits for the 16th month in July at 13.93%. To tame stubbornly high inflation, the RBI has raised the key interest rate three times this year to 5.4%. The central bank had projected retail inflation to average 6.7% in 2022-23.

The CNX Nifty traded in a range of 17,685.85 and 17,519.35. There were 34 stocks advancing against 15 stocks declining, while 1 stock remains unchanged on the index.   

The top gainers on Nifty were Grasim Industries up by 3.58%, NTPC up by 2.96%, Adani Ports &SEZ up by 2.94%, JSW Steel up by 2.84% and Titan Company up by 2.78%. On the flip side, Eicher Motors down by 3.67%, Indusind Bank down by 1.65%, Bharti Airtel down by 1.32%, Asian Paints down by 0.91% and HDFC down by 0.76% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 24.97 points or 0.39% to 6,356.59 and Germany’s DAX decreased 53.09 points or 0.4% to 13,218.87, while UK’s FTSE 100 increased 0.90 points or 0.01% to 7,480.64.

Asian markets ended mostly higher on Friday followed by overnight gains on Wall Street as the US government reported the US economy contracted mildly than initially expected in the second quarter. But investors are cautiously awaiting US Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole economic symposium due later in the day for further clues about the pace of the US Fed's interest rate hikes. Although, Chinese shares declined despite news of US-China agreement that would allow US regulators access to audits of Chinese companies that are listed on American exchanges.

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