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Indian equity benchmarks snapped their three-day winning streak and ended lower on Friday tracking losses in index heavyweights Reliance Industries, Ultratech Cement and SBI amid weak global cues. Markets made slightly positive start, as traders took some support with industry chamber PHDCCI’s statement that the economy is recovering at a fast pace from the recent lows of April and May on the back of declining new coronavirus cases, continued unlocking in various parts of the country and calibrated economic reforms announced by the government. However, the domestic markets soon fell into the red after the Reserve Bank of India (RBI) kept repo rate unchanged for seventh time straight and continued with an accommodative stance, citing the need to support ongoing growth recovery amid continued uncertainty and global financial market volatility. The central kept the repo rate unchanged at 4% and the reverse repo rate, the borrowing rate, unchanged at 3.35%.

Markets continued their sluggish trade in late afternoon session, as traders remain worried with Nobel laureate economist Abhijit Vinayak Banerjee apprehended that the impending third wave of the COVID-19 pandemic might adversely impact the GDP, and its growth rate might go down to 7 percent, even below the IMF's recent projection of 9.5 percent. Adding more pessimism, foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 719.88 crore on Thursday, as per provisional exchange data. However, losses remain capped as some optimism remained among traders with Revenue Secretary Tarun Bajaj’s statement that Retro tax withdrawal bill  will give confidence to the investor community regarding India's stable tax regime. Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. Besides, RBI retained the real GDP growth projection at 9.5 per cent for 2021-22 as domestic economic activity has started normalising with the ebbing of the second wave of the virus and the phased reopening of the economy. In the June monetary policy, the RBI had lowered the growth projection for 2021-22 to 9.5 per cent from 10.5 per cent estimated earlier.

On the global front, Asian markets settled mostly lower on Friday with nervousness over the spread of the COVID-19 Delta variant coronavirus and uncertainty about government policy in China keeping underlying sentiment cautious. Market participants also looked ahead to U.S. jobs data due later in the day for clues to the pace of economic recovery and the rate outlook. European markets were trading higher, as investors shrugged off data showing that Germany's industrial production declined unexpectedly in June. German industrial output dropped 1.3 percent in June from May, when production was down by revised 0.8 percent. Back home, on the sectoral front, aviation industry stocks were in focus with ratings agency ICRA’s report that domestic air passenger traffic sequentially grew by 56-57 per cent at around 48-49 lakh in July. The domestic air passenger traffic stood at 31.1 lakh in June 2021. According to the ratings agency, the growth on YoY basis was 132 per cent.

Finally, the BSE Sensex fell 215.12 points or 0.39% to 54,277.72, while the CNX Nifty was down by 56.40 points or 0.35% to 16,238.20.   

The BSE Sensex touched high and low of 54,633.58 and 54,210.33, respectively and there were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.23%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Telecom up by 1.39%, Utilities up by 1.13%, Power up by 0.98%, Industrials up by 0.41% and TECK up by 0.20%, while Energy down by 1.45%, Realty down by 1.01%, Basic Materials down by 0.55%, Metal down by 0.50% and Consumer Durables down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.11%, Bharti Airtel up by 1.49%, Tech Mahindra up by 1.37%, Maruti Suzuki up by 1.08% and NTPC up by 0.99%. On the flip side, Reliance Industries down by 2.07%, Ultratech Cement down by 1.70%, SBI down by 1.40%, Tata Steel down by 1.22% and HDFC down by 1.04% were the top losers.

Meanwhile, Industry chamber PHDCCI has said the economy is recovering at a fast pace from the recent lows of April and May 2021 on the back of declining new coronavirus cases, continued unlocking in various parts of the country and calibrated economic reforms announced by the government. 

At this juncture, it said there is a need to further fuel the drivers of household consumption and private investments to enhance the aggregate demand in the economy as it will have an accelerated effect on expansion of capital investments in the country.

PHDCCI President Sanjay Aggarwal suggested that more and more direct benefit transfers need to be considered for the urban and rural poor under the various welfare schemes.

The CNX Nifty traded in a range of 16,336.75 and 16,223.30 and there were 23 stocks advancing against 27 stocks declining on the index.     

The top gainers on Nifty were Indusind Bank up by 2.94%, Adani Ports &SEZ up by 2.37%, Indian Oil Corporation up by 1.97%, Tech Mahindra up by 1.59% and Tata Consumer Product up by 1.52%. On the flip side, Cipla down by 3.53%, Reliance Industries down by 2.07%, Shree Cement down by 1.89%, Ultratech Cement down by 1.42% and Tata Steel down by 1.29% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 8.64 points or 0.12% to 7,129.07, France’s CAC increased 11.28 points or 0.17% to 6,792.47 and Germany’s DAX increased 32.57 points or 0.21% to 15,777.24.

Asian markets settled mostly lower on Friday ahead of US non-farm payrolls report due later in the day, but losses were limited by positive cues from Wall Street overnight after data showed initial unemployment claims declined for a second week. China shares closed lower on worries over a continuing surge of Covid-19 cases and tightening government regulations. However, Japanese shares gained even as the country expanded its Covid-19 emergency curbs to cover more than 70 percent of the population, as a record surge in cases strained hospitals in the Olympics host city Tokyo and other parts of the country.

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