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Indian markets plummeted on Thursday amid a global sell-off as lingering worries surrounding inflation and rising interest rates spooked investors. Today, markets are likely to get optimistic start tracking firm trade in Asian markets. Some support will come as India’s industrial production rose 1.9 per cent in March 2022. As per the Index of Industrial Production (IIP) data released by the National Statistical Office (NSO), the manufacturing sector’s output grew 0.9 per cent in March 2022. However, some cautiousness may come as India’s headline inflation galloped for a seventh straight month to touch an 8-year high of 7.79 per cent in April on rising food and fuel prices, raising the odds of an interest rate hike by the RBI early next month to tame prices. Meanwhile, ratings agency Crisil said price rise is getting broad-based, and the Reserve Bank is likely to respond with rate hikes of up to 1 percentage point in FY23. Traders will be concerned as Finance Secretary TV Somanathan said India's economic growth rate is likely to slow if the central bank hikes interest rates. As per a private report, India's central bank is likely to raise its inflation projection for the current fiscal year at its June monetary policy meeting and will consider more interest rate hikes. Also, the country's foreign exchange reserves declined by $28.05 billion to $607.31 billion at the end of March this year from $635.36 billion at the end of September 2021. Infrastructure industry stocks will be in focus as Union minister Nitin Gadkari said the government is committed to expanding the national highway network across the country with the aim of constructing 18,000 km of highways in 2022-23 at a record speed of 50 km per day. There will be some reaction in consumer durable industry stocks with a private report that prices of home appliances and consumer electronics, including TV, washing machines, and refrigerators, are expected to go up by 3 to 5 per cent from May end or the first week of June as manufacturers pass on the impact of rising input costs to buyers. Traders will also be eyeing some important earnings announcement including that of SBI, Bank of Baroda, Tech Mahindra, Eicher Motors.

The US markets ended mostly lower on Thursday as investors juggled signs of peaking inflation with the prospect of more aggressive rate hikes. Asian markets are trading mostly in green on Friday with MSCI's broadest index outside Japan rising 1.3 percent despite a mixed session on Wall Street overnight.

Back home, Indian equity benchmarks extended their fall for the fifth straight session and ended lower with losses of over two percent on Thursday, as investors remained worried ahead of Index of Industrial Production (IIP) data for March and crucial retail inflation (CPI) reading for April, which will be released later today. A broader decline in global stocks following U.S. consumer price data also dented investor sentiment. The markets made a gap down opening, as traders were concerned with private report that tightening of policy rates by major central banks, including the RBI, would adversely impact demand in the next 6-8 months and slow down the recovery process. Some anxiety was also among the local traders with private report has lowered its forecasts for India's economic growth in the next two fiscal years, saying a global slowdown, surging oil prices and weak domestic demand would take a toll on Asia's third-largest economy. It said gross domestic product growth will be 7.6% for fiscal 2023 and 6.7% for fiscal 2024, 30 basis points lower than the previous estimates. Benchmarks enlarged their losses in late afternoon session, amid a private report stating that India Inc stares at a further decline in operating margins and profitability in the coming quarters owing to the twin blows of a depreciation in the value of the rupee against major currencies and a rise in interest rates after a surprise intervention by the Reserve Bank of India (RBI) last week. Adding to the pessimism, FPIs have continued their selling spree for seven straight months now. According to NSE data, FPIs sold Rs 3,609.35 crore on May 11, 2022 whereas domestic investors bought Rs 4,181.2 crore worth of equities. Further, a weaker rupee erodes FPI returns for Indian equities. Meanwhile, to strengthen the regulatory framework for collective investment schemes, markets regulator SEBI has enhanced the net worth criteria and track record requirements for entities managing such schemes. Finally, the BSE Sensex fell 1158.08 points or 2.14% to 52,930.31 and the CNX Nifty was down by 359.10 points or 2.22% to 15,808.00.

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