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Indian benchmarks snapped their six-session rally to close marginally lower on Thursday amid profit booking in banking and energy counters. Today, markets are likely to get flat-to-positive opening ahead of the Reserve Bank of India's (RBI’s) monetary policy outcome later in the day amid positive cues from Asian counterparts. The central bank is likely to rise rates by 35-50 bps today as India's headline inflation continues to be 7 per cent plus, way above the bank's upper end of the tolerance band. Some support will come as foreign institutional investors (FIIs) net bought shares worth Rs 1,474.77 crore on August 4, as per provisional data available on the NSE. Traders may take note of report that Commerce and industry minister Piyush Goyal is likely to meet export promotion councils on Friday to discuss the country's export performance, targets and various trade agreements India is currently negotiating. However, some cautiousness may come with the report by the SBI Research Ecowrap stating that India's fiscal deficit in the current financial year is expected to come around 6.5 per cent, as against the budget estimate of 6.4 per cent. Fiscal deficit for Q1FY23 has reached 21.2 per cent of the annual target compared to 18.2 per cent in Q1 FY22. Besides, to maintain external sector balance at a comfortable level over the medium term, the International Monetary Fund (IMF) has recommended that India should gradually withdraw its fiscal and monetary policy stimulus, develop export infrastructure, and negotiate free-trade agreements with key trading partners to provide a sustainable boost to exports. Meanwhile, SEBI has amended mutual fund rules to remove the applicability of the definition of associate to sponsors that invest in various companies on behalf of the beneficiaries of insurance policies. The new rules will become effective from September 3. Telecom industry stocks will be in focus with report that within days of conducting 5G auctions, Telecom Minister Ashwini Vaishnaw has said the government has completed the spectrum harmonisation process, paving the way for players' holdings to be streamlined within a particular band for greater efficiency. There will be lots of earnings announcements too, to keep the markets in action.

The US markets ended mostly lower on Thursday as gains in high-growth stocks offset losses in energy shares. Asian markets are trading mostly in green on Friday as China conducts military exercises around Taiwan.

Back home, Indian equity benchmarks ended the day flat with negative bias after witnessing volatility on Thursday as market participants remained on sidelines ahead of the Reserve Bank of India's monetary policy decision due on Friday. Key gauges made positive start, as traders took some support as the finance ministry released the fifth instalment of revenue deficit grant of Rs 7,183 crore to 14 states for the current fiscal. Some support also came with a report that the Confederation of Indian Industry president Sanjiv Bajaj asked the Central government to contemplate reducing the personal income tax rates to spur economic activities. He also said the country's underlying growth drivers are strong and the economy would grow in the range of 7.4 per cent to 8.2 per cent in the next fiscal. Traders took note of report that the government plans to facilitate easier financing norms to activities pertaining to the manufacturing and services hubs envisaged under the proposed revamped law for Special Economic Zones (SEZs), also known as Development (Enterprise and Services) Hub Bill, 2022. However, markets erased all of their gains and fell sharply in afternoon deals, as traders got anxious with the government data showed that India's foreign direct investment to gross domestic product ratio eased to 2.7% in fiscal year ending March 31, 2022 from 3.1% in the previous financial year. But, markets managed to trim most of losses in late afternoon trade, as traders found some solace with from domestic rating agency’s report in which it has revised the growth estimate for Housing Finance Companies (HFCs) to 10-12 per cent for FY23 from an earlier projection of 9-11 per cent. It noted that the upwards revision of the growth of HFCs was in expectation of a continued improvement in disbursements. Meanwhile, SEBI has restructured its advisory committee on market data that recommends policy measures pertaining to securities market data access and privacy. Finally, the BSE Sensex fell 51.73 points or 0.09% to 58,298.80 and the CNX Nifty was down by 6.15 points or 0.04% to 17,382.00.

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