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Indian markets pared gains after hitting record high to end flat on Friday as gains in pharma, metal and heavyweight RIL were offset by losses in IT stocks and banks. Today, the start of holiday truncated week is likely to be negative following losses in global peers as fears of rising inflation and a relentless surge in Delta variant of the coronavirus in Asian countries dampened investors’ risk appetite. Traders will be concerned as Niti Aayog CEO Amitabh Kant expressed concern over high food inflation due to higher prices of oilseeds and edible oils. He also said the state governments must take the lead in instituting labour reforms and rationalising costs of power to the industry. There will be some cautiousness as India recorded 38,325 fresh Covid-19 cases in the last 24 hours, taking the total caseload to 31,143,595, according to Worldometer. The death count increased to 414,141 with 501 new fatalities, the data showed. However, some respite may come later in the day with Chief Economic Advisor Krishnamurthy Subramanian’s statement that the country’s economy will start witnessing a growth of 6.5 to 7 per cent from fiscal 2023 onwards, helped by various reforms undertaken by the government so far and also as Covid-19 vaccination drive progresses. Some support may come as RBI data showed that the overseas direct investment of domestic companies more than doubled to $2.80 billion in June this year. India Inc had invested $1.39 billion in overseas ventures in the year-ago month. Meanwhile, RBI data showed that the country's foreign exchange reserves increased by $1.883 billion to touch a record high of $611.895 billion in the week ended July 9. Aviation sector stocks will be in focus as Union Civil Aviation Minister Jyotiraditya Scindia said the COVID-19 pandemic hit the aviation sector in the country hard but now the things are improving. There will be some reaction in oil & gas industry stocks as Commerce and Industry Minister Piyuh Goyal said India has set a target of 20 per cent ethanol-blending with petrol by 2023-24 and the ultimate goal is to have 100 per cent ethanol-run vehicles. Power stocks will be in limelight as total outstanding dues owed by electricity distribution utilities or discoms to power producers fell 15.25 per cent to Rs 82,305 crore in May 2021 from a year ago. There will be lots of earnings reaction based on the performance of the companies.

The US markets ended lower on Friday amid weakness in big technology companies like Apple and Amazon. Asian markets are trading in red on Monday on concerns about the impact of elevated inflation and Covid-19 outbreaks on economic prospects.

Back home, Oscillating between gains and losses, Indian equity benchmarks pulled back from their all-time highs to settle on a flat note on Friday due to selloffs mainly in IT, TECK and Banking counters amid lack of directional cues from global markets. Indian market opened with gains, as traders took encouragement with the Reserve Bank of India’s (RBI) report that the tapering of the second wave, coupled with an aggressive vaccination push, has brightened near-term prospects for the Indian economy, and the Indian economy may have grown 22.1 per cent in the April-June quarter. Some optimism also came with the data released by the Commerce Ministry showed that the country's exports rose by 48.34 per cent to $32.5 billion on account of healthy growth in shipments of petroleum products, gems and jewellery, and chemicals, leather and marine goods. However, markets failed to maintain gains and ended flattish as India recorded a spike of 39,072 fresh Covid-19 cases in the last 24 hours, taking the total caseload to 31,025,875, according to Worldometer. The death count increased to 412,563 with 544 new fatalities. Traders overlooked a private report stating that the June inflation data showed annual retail price growth steady at 6.26 percent versus 6.3 percent in May. This takes off pressures upon the central bank, which was battling apprehensions of higher inflation risks soon after its June 4 review. Meanwhile, Ministry of Finance has released Rs 75,000 crore to the States and Union Territories (UTs) with legislature under the back-to-back loan facility in lieu of Goods and Services Tax (GST) compensation. This release is in addition to normal GST compensation being released every 2 months out of actual cess collection. Finally, the BSE Sensex fell 18.79 points or 0.04% to 53,140.06, while the CNX Nifty was down by 0.80 points or 0.01% to 15,923.40.

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