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Indian markets closed in the red for the fourth consecutive day on Thursday, as micro data weighed on sentiment coupled with losses in energy, IT and financial stocks. Today, the start of session is likely to slightly positive tracking gains in global markets. Investors will continue to watch out for the OPEC+ meet outcome that was delayed to today after the United Arab Emirates blocked a plan for an immediate reduction in supply cuts. Some support will come as the India Meteorological Department (IMD) said Southwest Monsoon over the country is likely to be normal in July. In the forecast for July, IMD Director General Mrutunjay Mohapatra said rainfall is not expected to be good in the first week, but it is likely to pick up in the second half of the second week of July. Traders may take note of report that former Union agriculture minister Sharad Pawar said agricultural universities are essential for strengthening the country's economy. However, traders may be concerned as India recorded 43,360 infections and 796 fatalities in the last 24 hours. The total coronavirus caseload stands at 30,453,937, while Covid-19 deaths in India have crossed 400,000. In just over five weeks, from May 23 to July 1, the country reported 100,000 deaths from Covid even as the second wave waned. The World Health Organization has said the Delta variant of Covid-19 is now present in nearly 100 countries as per conservative estimates, and warned that in the coming months the highly transmissible strain will become the dominant variant of the coronavirus globally. There may be some cautiousness as Reserve Bank Governor Shaktikanta Das said the second wave of the pandemic took a grievous toll on India, but the dented economic activity has started recovering from late-May. In a first, Das flagged the rising data breaches and cyber-attacks as a risk facing the economy, along with others like firming global commodity prices. There will be some reaction in banking stocks as the Financial Stability Report of Reserve Bank of India showed banks did not see their bad loan position worsening during the pandemic year of 2020-21 as the gross non-performing asset (GNPA) ratio stayed stable at 7.48% of the gross advances at the end of March 31. It added that The GNPA ratio of banks may rise to 9.8-11.22 percent by March 2022 under various stress scenarios due to the impact of the COVID pandemic. Auto stocks will be in focus as major automakers, including Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, Kia, Toyota and Honda, reported healthy growth in passenger vehicles sales in June, recovering from the disruptions induced by the second wave of COVID-19. There will be some buzz in power sector stocks with power ministry data showing that power consumption in the country grew by nearly 10 per cent in June to 115.39 billion units (BU) compared to a year ago, but is still lower than the pre-COVID level.

The US markets ended higher on Thursday as a new quarter and the second half of the year began with upbeat economic data and a broad-based rally. Asian markets are trading mostly in green on Friday as investors look ahead to a closely-watched US jobs report set to be released later.

Back home, Indian equity benchmarks closed lower for a fourth straight session on Thursday as new Delta and Delta plus variants of novel coronavirus push Covid-19 cases higher across the globe. Markets made slightly positive start as traders took some support with Principal Economic Adviser (PEA) Sanjeev Sanyal’s statement that the Indian economy is likely to witness close to double-digit growth in the current fiscal year despite the second Covid-19 wave ravaging the country. Some support came as data released by the RBI showed India reported a current account surplus of 0.9 percent of GDP in the pandemic-hit FY21, as against a deficit of 0.9 percent in FY20. However, key indices erased gains and turned lower in morning deals as Indian manufacturing activity fell back into decline in the month of June, as the intensification of the pandemic and strict containment measures negatively impacted on demand. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - fell to 48.1 in June as against 50.8 in May. Markets continued to show choppy movement with negative bias, as India's external debt surged by $11.5 billion year-on-year to $570 billion as of March-end 2021, according to the Reserve Bank of India data. The external debt to GDP ratio rose to 21.1 per cent as of March-end 2021 from 20.6 per cent a year ago. Some concern also came with the rating agency -- Standard and Poor's (S&P) has said Indian banks face systemic risks as the country wades through the aftermath of the Covid-19 second wave. The banking sector's weak loans are likely to remain elevated at 11-12 per cent of gross loans in the next 12-18 months. Traders also took note of Principal Economic Advisor Sanjeev Sanyal’s statement that India's economy is on the mend after the pandemic-induced shocks but it may take an additional year or so to achieve the $5 trillion-mark. Meanwhile, India’s fiscal deficit in April-May stood at 8.2 per cent of the budget estimates (BE), as compared to 59 per cent in the same period last year. The deficit was less 30 per cent less of last-year's level of Rs. 4.7 trillion amid the nationwide lockdown to contain the coronavirus. Finally, the BSE Sensex fell 164.11 points or 0.31% to 52,318.60, while the CNX Nifty was down by 41.50 points or 0.26% to 15,680.00.  

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