Indian equity benchmarks ended Thursday's session with healthy gains of over a percent, even as global markets faced selling pressure amid spiking coronavirus cases. A surge in the last hour of the trading largely helped markets to settle above the psychological 10,700 (Nifty) and 36,450 (Sensex) levels. Key gauges made slightly positive start but soon turned volatile, as traders got cautious with data showing that India's exports fell for the fourth straight month in June as shipments of key segments like petroleum and textiles declined but the country's trade turned surplus for the first time in 18 years as imports dropped by a steeper 47.59 per cent. Exports in value terms declined by 12.41 per cent to $21.91 billion in June on weak global demand due to COVID-19. However, domestic markets gained some traction and traded in fine fettle, as traders took encouragement with NITI Aayog CEO's statement that India is set to make the Public Distribution System location independent to ensure that no one, especially the inter-state migrants, is left behind, citing the One Nation, One Card initiative being implemented by the government as a transformative solution in response to the COVID-19 pandemic. Benchmark indices witnessed sudden spike in late afternoon session, as investors' morale remained upbeat as India and the European Union adopted a joint declaration on moving towards a more circular economic model that provides for reduction in primary resource consumption and enhances the use of secondary raw materials. Traders took note that global rating firm S&P Global applauded the decision of India banks to raise fresh capital and stated that the move will provide solidity to the organisations during these rocky times and assist them to withstand the economic slump amid the coronavirus pandemic. Traders paid no heed towards Moody's Investors Service's report that the coronavirus-triggered global recession will continue to put pressure on non-financial companies in Asia-Pacific, and negative credit trends will persist through the rest of 2020. Finally, the BSE Sensex rose 419.87 points or 1.16% to 36,471.68, while the CNX Nifty was up by 121.75 points or 1.15% to 10,739.95.

The US markets ended lower on Thursday in a decline led by technology stocks as investors parsed mixed corporate earnings reports and economic data in the wake of a drop in Asian markets. US-China tensions were also a factor. Weakness on markets also came following the release of a report from the Labor Department showing the decline in first-time claims for unemployment benefits nearly ground to a halt last week. The Labor Department said initial jobless claims slipped to 1.300 million in the week ended July 11th, a decrease of just 10,000 from the previous week's revised level 1.310 million. Street had expected jobless claims to drop to 1.250 million from the 1.314 million originally reported for the previous week. Jobless claims fell for the fifteenth consecutive week, although the pace of decline has slowed considerably from April and May. The negative sentiment was partly offset by a report from the Commerce Department showing another substantial increase in retail sales in June, although the data was seen as old news as some states roll back their reopening plans due to a surge in coronavirus cases. The report said retail sales soared by 7.5 percent in June after skyrocketing by an upwardly revised 18.2 percent in May. Street had expected retail sales to jump by 5.0 percent compared to the 17.7 percent spike originally reported for the previous month. Excluding sales by motor vehicles and parts dealers, retail sales still shot up by 7.3 percent in May after soaring by 12.1 percent in May. Ex-auto sales were also expected to surge up by 5.0 percent.

Crude oil futures settled in red on Thursday on worries about the outlook for near term energy demand and the latest decision by the Organization of the Petroleum Exporting Countries and its allies to start tapering production cuts beginning next month. Further, rising tensions between the US and China and the relentless surge in new coronavirus cases that has raised fears many countries across the world might resort to fresh lockdown measures have once again triggered concerns about energy demand. Crude oil futures for August fell 45 cents or 1.1 percent to settle at $40.75 a barrel on the New York Mercantile Exchange. September Brent crude declined 42 cents or 1 percent to settle at $43.37 a barrel on London's Intercontinental Exchange.

Snapping previous day's gaining streak, Indian rupee ended weaker against dollar on Thursday with fresh dollar demand by banks and importers. Besides, dollar gains against other currencies overseas too hit the rupee sentiment. Investors were worried as India's merchandise exports declined by 12.41% to $21.91 billion in June 2020 as compared to same period of last year, mainly due to drop in shipments of petroleum, textiles, engineering goods, and gems and jewellery items. However, gains in domestic equity markets provided some support to the rupee, keeping the downside in check. On the global front, dollar found support on Thursday as simmering Sino-U.S. tensions and weak Chinese consumption data knocked investors' faith in a fairly swift global economic recovery from the coronavirus crisis. Finally, the rupee ended at 75.18, 3 paise weaker from its previous close of 75.15 on Wednesday.

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 4705.91 crore against gross selling of Rs 4740.88 crore, while in the debt segment, the gross purchase was of Rs 1250.71 crore with gross sales of Rs 1832.23 crore. Besides, in the hybrid segment, the gross buying was of Rs 48.58 crore against gross selling of Rs 64.50 crore.

The US markets ended lower on Thursday following the release of a report from the Labor Department showing the decline in first-time claims for unemployment benefits nearly ground to a halt last week. Asian markets are trading mostly higher on Friday shrugging off an overnight fall in US stocks as the United States prepares to debate fresh economic stimulus to see the country through its coronavirus outbreak. Indian markets ended higher on Thursday as upbeat earnings from Infosys lifted IT stocks even as coronavirus cases in the country continued to rise. Today, the start of last session of the week is likely to optimistic tailing positive cues from Asian peers. Traders will be taking encouragement with Nasscom President Debjani Ghosh's statement that India has the potential to become a magnet for digital innovation by focusing on areas like talent, policy framework and trust. Some support will come with report that Investments through participatory notes (P-notes) in the domestic capital market surged to Rs 62,138 crore till June-end, making it the third consecutive monthly rise. Traders may take note that India and the United States on Thursday discussed the possibility of a free trade pact. However, there may be some cautiousness as India has recorded over 35,000 Covid-19 cases in the past 24 hours - its biggest single-day spike so far - taking the total number of coronavirus cases to 1,005,637. With over 680 deaths on Thursday, the country's death toll has now risen to 25,609. Traders may be concerned as the domestic rating agency ICRA revised its forecast for contraction in India's GDP in FY21 to 9.5 percent from 5 percent it expected earlier, as continued lockdowns in some states have affected the recovery seen in May and June. There will be some buzz in the aviation stocks with Civil Aviation Minister Hardeep Singh Puri's statement that India has established individual bilateral bubbles with France and the US that will allow airlines of each country in the pact to operate international flights, and added that similar arrangement with Germany and the UK will soon be permitted. MSME stocks will be in focus as the finance ministry said banks have sanctioned loans of about Rs 1.23 lakh crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector, reeling under the economic slowdown caused by COVID-19 pandemic. There will be some reaction in power stocks with report that the government is considering a proposal by the Ministry of New and Renewable Energy (MNRE) to impose 20 percent basic customs duty on solar modules to provide an edge to domestic manufacturers and discourage imports, particularly from China. There will be lots of earnings reaction based on the performance of the companies.

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

Nifty Top volumes

• Infosys has reported 11.45% rise in its consolidated net profit attributable to owners at Rs 4,233 crore for Q1FY21 as against Rs 3,798 crore for Q1FY20. 
• Reliance Industries' telecom arm -- Jio has unveiled JioGlass to strengthen its presence in virtual reality space and capitalise on remote working culture triggered by COVID-19 pandemic.
• IndusInd Bank has successfully completed integration with CRMNEXT, the leading enterprise solution provider for banks and financial services. 
• NTPC has entered into a MoU with NIIF to explore opportunities for investments in areas like renewable energy, power distribution among other areas of mutual interest in India.