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Indian markets ended lower on Thursday, weighed by banks and financials after the US Federal Reserve pulled up the rate hike timeline to 2023 from 2024 earlier citing rising inflation. Today, markets are likely to make positive start after two days of losses amid mixed global cues. Inflation worries likely to ease somewhat as oil prices fell from multi-year highs on demand worries after new coronavirus cases jumped in Britain. Some support will come as the Confederation of Indian Industry (CII) urged the government to provide a fiscal stimulus worth Rs 3 trillion along with direct cash transfers to perk up domestic demand. The industry body also sought expansion in the Reserve Bank of India (RBI) balance sheet to meet the demand exigencies of the pandemic. Meanwhile, India maintained 43rd rank on an annual World Competitiveness Index compiled by the Institute for Management Development (IMD) that examined the impact of COVID-19 on economies around the world this year. However, traders may be concerned with a private report that lockdowns in April and May to contain Covid-19 have likely led to India’s economy contracting 12 per cent in the June quarter as against 23.9 per cent contraction in the same quarter in 2020. Besides, an assessment made by the Reserve Bank revealed that the devastating second wave of the coronavirus pandemic in April-May is estimated to have cost the nation Rs 2 lakh crore in terms of output. There will be some cautiousness as India reported 67,208 new Covid-19 infections over the past 24 hours, data from the health ministry showed. The country's total case load now stood at 29.70 million, while total fatalities are at 381,903, the data showed. Coronavirus-related deaths rose by 2,330 overnight. Traders may take note of Fitch Ratings’ statement that global inflation trends and associated risks around interest rates and exchange rates may have direct sovereign credit implications, and added that a critical question for government debt sustainability is how inflation will affect debt/GDP ratios. There will be some reaction in Information and broadcasting industry stocks as the Centre amended the Cable Television Network Rules to provide for a three-layer statutory mechanism for the redressal of complaints relating to content broadcast by television channels. Auto stocks will be in focus with a private report stating that India's automotive industry sold 5.35 lakh units in retail sales in May, a sharp 55 percent decline compared to April this year and a 71 percent decline compared to May 2019.

The US markets ended mostly lower on Thursday as investors continued to interpret new guidance from the Federal Reserve, which is now looking at potentially raising interest rates as soon as 2023. Asian markets are trading mixed on Friday following an overnight drop for the Dow Jones Industrial Average on Wall Street.

Back home, Indian equity benchmarks declined for second straight session on Thursday mirroring losses in global markets after the US Federal Reserve hinted that it may raise interest rates at a much faster pace than assumed. Equity indices started session deep in the red, as traders were concerned as India reported 62,224 new Covid-19 cases on Wednesday, taking the total to 29,633,105. The death count climbed to 3,79,573 with 2,542 fresh fatalities. Sentiments remained downbeat with a RBI article stating that bank deposits and currency holding with the public have been adversely impacted during the second COVID wave, indicating a heavy outgo towards pandemic-induced medical expenditure. Sentiments were also fragile as foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 870.29 crore on June 16, as per provisional exchange data. Markets magnified their losses in late afternoon session as anxiety came as the Reserve Bank of India (RBI) in its ‘State of the Economy’ report June bulletin has said that it sees reasons to be cautiously optimistic as the second wave of the pandemic seems to have hit domestic demand, while other economic indicators show the economy is coming back on stream. Traders also took a note of the commerce ministry said that sellers who do not declare local content percentage while uploading their products at public procurement portal GeM will lose out on business and will not be able to participate in bids in which buyer has chosen to procure only made-in-India items. However, key indices were eventually able to claw back some of their losses by the close, as traders found some solace with Confederation of Indian Industry (CII) stating that the country's gross domestic product (GDP) is expected to grow at 9.5 per cent in the current financial year (FY 2021-22). This will take the GDP to a level that is slightly higher than in FY20. The strong growth in the second-half will be supported by robust external demand and large scale coverage of vaccination allowing resumption of economic activity. Finally, the BSE Sensex fell 178.65 points or 0.34% to 52,323.33, while the CNX Nifty was down by 76.15 points or 0.48% to 15,691.40.

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