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Indian markets traded under selling pressure and ended in red for the second straight session on Friday as investors offloaded IT, teck and metal stocks amid a bearish global trend. Today, markets are likely to start new week on cautious note tracking mixed cues from global peers. Foreign fund outflows likely to dent domestic sentiments, as foreign institutional investors (FII) sold shares worth net Rs 266.98 crore on August 18. There will be some cautiousness as retail inflation for farm and rural workers inched up to 7.43 per cent and 7.26 per cent in July compared to 6.31 per cent and 6.16 per cent, respectively, in June this year, mainly due to higher prices of certain food items. However, traders may be taking encouragement as Moody’s affirmed India’s sovereign rating at ‘Baa3’ with a stable outlook and said high growth will support a gradual increase in income levels, which will further contribute to economic strength. Moody’s said it expects India’s economic growth to outpace all other G20 economies through at least the next two years, driven by domestic demand. Some support may come as latest data by the Reserve Bank of India showed India’s foreign exchange reserves snapped a three-week losing streak and increased by $708 million to $602 billion in the week ended August 11. The rise in the reserves was mainly on account of an increase in the foreign currency assets, which grew by $999 million to $534 billion in the previous week. Traders may take note of Finance Secretary T V Somanathan’s statement that the government will stick to the fiscal deficit target of 5.9 per cent of the GDP as robust tax, non-tax collections will help meet the spending requirement and make up for any shortfall in disinvestment proceeds. Besides, a private report indicated that corporate India's deal activity witnessed a 58 per cent jump in value terms to $3.1 billion in July, largely driven by big-ticket transactions, while caution in the private equity world led to a reduction in overall volumes. There will be some buzz in private hospitals stocks as ICRA Ratings in a report said that corporate hospitals are set to clock an 8-10 per cent revenue growth and strong margins in the current fiscal. Meanwhile, Jio Financial Services, the demerged financial services entity of Reliance Industries, will be listed on the exchanges today.

The US markets ended mostly lower on Friday as gains in defensive sectors and energy offset weakness in megacap growth stocks, while investors looked toward next week's speech by Federal Reserve Chair Jerome Powell. Asian markets are trading mixed on Monday after China’s central bank cut its one-year loan prime rate to 3.45 per cent but left its five-year rate unchanged, disappointing investors.

Back home, in a highly volatile session, Indian equity benchmarks buckled under selling pressure for the second straight session on Friday as weakness in global markets continues to keep investors on the edge. The markets started on a negative note and remained in red terrain for most part of the session, as traders were concerned with the Reserve Bank of India's monthly bulletin stating that headline inflation is expected to average well above 6 per cent in the second quarter. It noted headline inflation, after reaching a low of 4.3 per cent in May 2023, rose in June and is expected to surge during July-August led by vegetable prices. Besides, fresh foreign fund outflows also hit investors’ sentiments. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,510.86 crore on Thursday after a day's breather, according to exchange data. However, benchmark indices regained some lost ground in the fag-end of the session as traders took support with Reserve Bank of India's article stating that investment activity is gaining momentum and the envisaged capital expenditure is set to jump by over 80 per cent to Rs 1.71 lakh crore in the current fiscal (FY24). It also said improvement in capacity utilisation of the manufacturing sector, pick-up in credit demand and improving consumer sentiments are helping the capex cycle. Traders took a note of report that corporate India's deal activity witnessed a 58 per cent jump in value terms to $3.1 billion in July, largely driven by big-ticket transactions, while caution in the private equity world led to a reduction in overall volumes. This surge in deal value was anchored by 29 deals valued at $2 billion, where six high-value transactions encompassing traditional sectors like IT, auto, retail, and manufacturing took the centre stage. But, key gauges failed to hold recovery and ended the session in red, as some pessimism remained among traders with private report stating that private equity and venture capital funds' investments in the country declined 5 per cent to $3.9 billion across 59 deals in July 2023. Finally, the BSE Sensex fell 202.36 points or 0.31% to 64,948.66 and the CNX Nifty was down by 55.10 points or 0.28% to 19,310.15.

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