Indian equity benchmarks settled with minor cut on Thursday after fluctuating between gains and losses during the session, following weak Asian equities. Trade was largely range-bound for most part of the session owing to volatility as weekly index future and option contracts expired today. Markets made positive start and managed to trade above their neutral lines, as traders took some support with report that India has moved four places on the Global Innovation Index (GII) 2020 to rank at 48 since 2019. This makes it the third-most innovative lower middle-income economy in the world. India at the 48th place also retains the highest rank in the central and southern Asia region. However, markets witnessed some selling activity in afternoon deals, as traders turned wary with Federation of Indian Export Organisations (FIEO) stating that the government's decision to cap export incentives under the Merchandise Exports from India Scheme (MEIS) at Rs 2 crore per exporter on exports made between September 1, 2020 to December 31, 2020 is going to seriously affect traders and cause uncertainty. However, key gauges once again entered into green terrain in late afternoon session, amid the latest IHS Markit Services Purchasing Managers' Index (PMI) indicated a slower rate of decline in business activity across the Indian service sector during August. The ongoing coronavirus pandemic 2019 (COVID-19) restrictions continued to adversely impact client demand and business operations. New business and output continued to contract at marked rates, albeit slower than the records seen in April and May. But, markets failed to hold gains and ended marginally lower, as rising coronavirus cases in the country dampened sentiments in the markets. Meanwhile, the 15th Finance Commission will hold a meeting with its economic advisory panel on Friday to discuss issues of GDP growth, GST compensation and fiscal consolidation. Finally, the BSE Sensex fell 95.09 points or 0.24% to 38,990.94, while the CNX Nifty was down by 7.55 points or 0.07% to 11,527.45.

The US markets ended deeply in red on Thursday as some traders looked to cash in on the recent strength in the markets. Tech giants Apple, Microsoft Alphabet and Amazon all posted steep losses on the day following recent strength. The fall came a day after the S&P 500 claimed its 22nd record close of the year, while the tech-heavy Nasdaq Composite arrived at its 43rd such all-time high and the Dow topped the 29,000 level for the first time since February. On the economic data front, the Labor Department released a report showing first-time claims for US unemployment benefits tumbled by more than expected in the week ended August 29th. The Labor Department said initial jobless claims declined to 881,000, a decrease of 130,000 from the previous week's revised level of 1.011 million. Street had expected jobless claims to drop to 950,000 from the 1.006 million originally reported for the previous week. A separate report from the Institute for Supply Management (ISM) showed a modest slowdown in the pace of growth in service sector activity in the month of August. The ISM said its services PMI dipped to 56.9 in August from 58.1 in July, but a reading above 50 still indicates growth in the service sector. Street had expected the index to edge down to 57.0. Meanwhile, with imports spiking by more than exports, the Commerce Department released a report showing the US trade deficit widened by much more than expected in the month of July. The Commerce Department said the trade deficit expanded to $63.6 billion in July from a revised $53.5 billion in June. The deficit in July was the widest since reaching $67.0 billion in July of 2008. Street had expected the trade deficit to widen to $58.0 billion from the $50.7 billion originally reported for the previous month.

Crude oil futures ended lower on Thursday as concerns remained over the outlook for demand. Oil prices saw even steeper losses as the US stock market sold off sharply on the heels of a tech selloff. Meanwhile, oil production in the Gulf of Mexico region has seen a significant recovery since the hurricane made landfall on August 27. The Bureau of Safety and Environmental Enforcement estimated that 16.3% of current oil production in the Gulf of Mexico was shut in, rebounding from about 84% around the time Laura reached the Gulf Coast. Crude oil futures for October lost 14 cents or 0.3 percent to settle at $41.37 a barrel on the New York Mercantile Exchange. November Brent crude declined 36 cents or 0.8 percent to settle at $44.07 a barrel on London's Intercontinental Exchange.

Tumbling for second straight session, Rupee ended substantially weaker against dollar on Thursday on account of continued dollar demand from importers and banks. Traders remained concern as FIEO stated that the government's decision to cap export incentives under the Merchandise Exports from India Scheme (MEIS) at Rs 2 crore per exporter on exports made between September 1, 2020 to December 31, 2020 is going to seriously affect traders and cause uncertainty. Market participants paid no heed to IHS Markit Services Purchasing Managers' Index (PMI) indicated a slower rate of decline in business activity across the Indian service sector during August. The ongoing coronavirus pandemic 2019 (COVID-19) restrictions continued to adversely impact client demand and business operations. On the global front; pound fell against the dollar on Thursday, extending its losses on a combination of dollar strength and weak domestic factors: the long-term damage to Britain's economy from the coronavirus and a lack of progress in Brexit negotiations. Finally, the rupee ended at 73.47, 44 paise weaker from its previous close of 73.03 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 7013.95 crore against gross selling of Rs 5786.24 crore, while in the debt segment, the gross purchase was of Rs 972.55 crore with gross sales of Rs 1396.79 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.89 crore against gross selling of Rs 8.05 crore.

The US markets settled lower on Thursday as investors dumped the high-flying technology sector. Asian markets are trading in red on Friday tracking sharp declines on Wall Street overnight. Indian markets ended flat on Thursday after banks slip in-trade, dragged by index heavyweights like ICICI Bank, Kotak Mahindra Bank and HDFC while IT stocks capped losses. Today, the start of session is likely to be gap-down following sell-off in the global markets. Traders will be concerned with ICRA's report that corporate revenues declined by 31 per cent in the June quarter, but profit margins decreased by a lesser degree to 3.6 per cent in the April-June period. Rising coronavirus cases is also likely to impact the markets. India has recorded its highest-ever single-day spike in new coronavirus cases, of over 84,000. The total now stands at 3,933,124. Investors will be looking ahead to the 15th Finance Commission meet, which is likely to meet today, to discuss the dwindling economic growth, tax collection, GST compensation to states, revenue deficit grant and fiscal consolidation. Though, some respite may come later in the day as Prime Minister Narendra Modi invited US companies to invest in India by taking advantage of its stable tax regime and attractive Foreign Direct Investment (FDI) policies. Traders may take note of report that Union Finance Nirmala Sitharaman has asked banks and NBFCs to support borrowers and that COVID-19 related distress must not impact the lenders' assessment of their creditworthiness. There will be some buzz in the banking stocks as Fitch Ratings said private sector banks, with stronger loss-absorption buffers, are likely to gain market share from their state-owned peers in the medium term. there will be some reaction in jewellery industry related stocks with the Gem and Jewellery Export Promotion Council's (GJEPC) statement that gems and jewellery exports are projected to decline by 25-30 per cent in the current fiscal as there was a complete washout of the first quarter due to lockdown to curb spreading of the COVID-19.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• TVS Motor Company has further invested a sum Rs 30 crore in Compulsorily Convertible Cumulative Preference Shares of UAPL. 
• ICICI Bank has launched Home Utsav, a virtual property exhibition that digitally showcases real estate projects by renowned developers from key cities across the country. 
• Dr. Reddy's Laboratories has launched Methylphenidate Hydrochloride Extended-Release Tablets USP, 18 mg, 27 mg, 36 mg and 54 mg. 
• Bharat Petroleum Corporation has launched the country's first certified reference material for testing chemical components of crude oils.