Benchmark equity indices ended in the negative terrain on Friday extending their losses for the second consecutive day led by the bleak global cues. Selling remained evident across the board during the entire session with selective buying in healthcare stocks. It was the US Federal Reserve's move to raise a key lending rate, which created havoc for equities across the globe. The Federal Reserve, on Thursday, increased the discount rate by one-quarter point to 0.75 percent with immediate effect. As expected, the domestic markets witnessed gap-down opening. They continued to lose ground tracking lower regional peers. The main indices managed to recoup most of their losses in late afternoon trades on the back of recovery in European shares after initial weakness. But they again turned choppy in last 30 minutes of trade. The Nifty finished the day below the crucial 4850-mark. Realty, metal and consumer durables stocks were hammered. Metal stocks corrected in trade as the Fed's move triggered rally in the dollar, which pulled the commodity prices lower. Fertilizer stocks, which were buzzing in early trades on the announcement of new 'nutrient-based subsidy regime', failed to hold on to their gains and most of them ended the day with deep cuts. On the positive side, the talks of assigning the 'Maharatna' status to state-run ONGC lured investors towards the counter. New listing, Thangamayil Jewellery remained in a sombre mood since beginning and closed below its issue price. Finally, the BSE Sensex dropped 136.21 points or 0.83% to end at 16,191.63 while the S&P CNX Nifty shed 42.85 points or 0.88% to settle at 4844.90.

The US markets closed modestly higher on the last trading day of the week as the investors get clarity on Federal Reserve's decision to begin dismantling emergency lending measures for banks. The major indices started on a subdued note on the worries by the Fed's announcement late Thursday, that it is raising the rate it charges banks for emergency loans, known as the discount rate. But soon the investors realized that the move was in right direction as financial system was recovering and that banks didn't need as much support. The Dow Jones Industrial Average rose 9.45 points, or 0.09%, to 10,402.35, its highest finish in a month. The broader Standard & Poor's 500 index was up by 2.42 points, or 0.22%, to 1,109.17, while the Nasdaq composite index closed up by 2.16 points, or 0.10%, to 2,243.87.

Crude prices continued their upmove on Friday due to supply worries in the wake of a strike in French refineries and on geopolitical tensions over Iran's nuclear posture. The easing of concern over Fed's increase in discount rate too provided some support to the crude and other commodities. Benchmark crude for March delivery settled up 75 cents, or 0.95 percent, at $79.81 a barrel, the highest after trading in a range of $77.76 to $79.95 on the New York Mercantile Exchange. In London, April Brent crude finished up 41 cents, or 0.53 percent, at $78.19 a barrel.

The Indian rupee declined marginally on Friday as the dollar rose and the euro hit a nine-month low after the Federal Reserve said it was raising the discount rate it charges banks for emergency loans. The domestic currency started weak and in the very opening trade plunged to its three and half month low of 46.47/48. The regional equity markets had given indication of weak start for the local markets and the rupee too followed the trend of decline in other currencies against dollar though it was able to pare most of its losses in last hours. Finally the rupee closed at 46.30, 3 paise lower compared to its Thursday's close of 46.27/28.

The FII on Friday were the net sellers in the equity segment with gross buying of Rs 2048.30 crore against gross sell of Rs 2077.20 crore, while in the debt segment they were the net buyers with a gross purchase of Rs 1895.40 crore against gross sales of Rs 257.80 crore.

The US markets closed marginally higher on Friday making it a week of all gains, the confusion over the Federal Reserve's discount rate hike got cleared and the markets again returned to their usual path. The Asian markets have made a good start and all the major markets barring China are trading up by about 2-3%. The cues for the domestic markets are of a gap-up start, though the markets have entered into a very crucial week, an event full weak with F&O expiry, rail and Union budget so the trade may turn volatile too.

Support and Resistance: S&P CNX Nifty and BSE Sensex

                                                                 Nifty Top volumes

• DLF has launched the first phase of its 200-acre project in Panchkula entailing an investment of nearly Rs 2,200 crore.
• Bharti Airtel is planning for preferential allotment of shares to its largest shareholder SingTel to finance its $10.7 billion bid for Zain's African assets.
• SAIL is in talks with some companies for acquiring coking coal blocks in Australia, New Zealand, Mozambique and Indonesia.
• NTPC along with few other PSU companies are likely to get 'maharatna' status within the next 60-90 days.
• Reliance Capital has increased its stake in Fame India from 8.13% to nearly 11% by buying additional 10 lakh shares from open market.