Indian benchmark equity indices staged a blockbuster performance on the last day of the week, by vehemently rallying by over one and half percent in the session and re-conquering their several psychological levels. Sentiments got a boost after a government report showed that India's fiscal deficit stood at Rs 4.88 lakh crore during April-December or 87.9 percent of the full-year target, indicating an improvement in its finances. The deficit was 100.2 percent of the full-year target during the same period a year ago. The improvement is mainly on account of buoyancy in tax collections, which have kept revenue deficit in check. Local sentiments also got buttressed by strong rally in global markets as a rebound in commodity prices and Bank of Japan's bold move to adopt negative interest rates to stimulate the Japanese economy stoked global risk appetite for equities. Some support also came with the buzz that Reserve Bank of India (RBI) is likely to go for a final 25-bps repo rate at its policy review meet on February 2, 2016. Appreciation in Indian rupee too aided sentiments. Snapping its three-day losing streak, Indian rupee firmed up by 30 paise to 67.93 against the US dollar on fresh selling of the American currency by exporters. On the global front, Asian markets ended higher on Friday, European markets too gained. Back home, after getting dismal start, Indian benchmarks gained momentum and entered into positive territory in early trade, tracking positive trade in other regional markets. Thereafter, the frontline indices started their northward journey and continued throughout the session as strong buying interest was seen across the metal and oil and gas sector on the back of rebound in commodity prices. Finally, the BSE Sensex surged 401.12 points or 1.64% to 24870.69, while the CNX Nifty ended up by 138.90 points or 1.87% to 7,563.55.

The US markets closed higher on Friday, booking a second straight weekly gain but posting the worst January performance since 2009. Friday's surge came amid a global equity rally following a surprise decision by the Bank of Japan to push a key interest rate into negative territory that some said could push the Federal Reserve to ease up on its plans to steadily raise interest rates. On the economy front, the economy bogged down at the end of 2015, raising questions about whether US growth is losing momentum. Gross domestic product - the value of everything a nation produces - expanded at a 0.7% annual rate from October to December. That was a big markdown from 2% growth in the autumn and 3.9% growth in the spring, even though it was largely expected. The Dow Jones Industrial Average added 396.66 points or 2.47 percent to 16,466.30, the Nasdaq was up 107.27 points or 2.38 percent to 4,613.95 while the S&P 500 gained 46.88 points or 2.48 percent to 1,940.24. 

Crude oil futures extended their rally on Friday, as rumors continued to swirl that Russia and OPEC could work collaboratively to cut production as a means to stem a prolonged downturn in global energy markets. Prices also got some support with Bank of Japan's surprise stimulus announcement. Also, the oil services firm Baker Hughes said Friday that US oil rigs declined for the sixth consecutive week last week falling by 12 to 498 for the week ending on Jan. 22. Benchmark crude oil futures for March delivery ended up by $0.44 or 1.31 percent to $33.66 a barrel after trading in a range of $32.66 and $34.41 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $36.02, up $1.22 or 3.48 percent on the ICE.

Snapping its three day losing streak Indian rupee bounced back against dollar on Friday due to selling of the greenback by banks and exporters. The domestic currency was looking strong from the very beginning and was supported by the surge in the equity markets. Further, sentiments also got a boost after a government report showed that India's fiscal deficit stood at Rs 4.88 lakh crore during April-December or 87.9 percent of the full-year target, indicating an improvement in its finances. On the global front, yen tumbled against the dollar and euro on Friday after the Bank of Japan announced a surprise negative interest rate policy, leading to forecasts that the greenback will hit 140 yen within two years.  Finally, the rupee ended at 67.79, 43 paise stronger from its previous close of 68.22 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 5898.88 crore against gross selling of Rs 6281.84 crore, while in the debt segment, the gross purchase was of Rs 1566.09 crore with gross sales of Rs 1182.25 crore.     

The US markets surged in last session supported by some good earnings and in reaction to the Bank of Japan's surprise decision to introduce negative interest rates. The Asian markets have made mostly a positive start and the Japanese market was heading for an almost one-month high as yen was on track for its longest slump. However, the Chinese shares got off to a weak start after an official measure of activity in the factory sector fell to its lowest since mid-2012. The Indian markets went for a rally in last session on some encouraging economic data and gains in the other global markets. Today, the start of the new week and the month is likely to be in green, though there will be some cautiousness too ahead of the RBI's monetary policy announcement tomorrow. Also, the Standard & Poor's Ratings Services has said that India will face challenges in sticking to the fiscal consolidation roadmap as the expected revenues may not be fully realised and subsidy cuts may be delayed. Meanwhile, Finance Minister Arun Jaitley has said that the Congress will "see reason" and help in passage of GST legislation, stuck in Rajya Sabha, in the Budget session of Parliament beginning next month. Markets may get some support with, NITI Aayog Vice-Chairman Arvind Panagariya's statement that India is expected to get on to a double-digit growth in the next 2-3 years if reform process continues. Steel stocks will kepp buzzing with Union Minister Narendra Singh Tomar stating that additional steps will be taken to protect domestic steel industry. Today, the auto stocks will be in action once the monthly sales numbers starts trickling in. The PSU oil marketing companies too are likely to react to the government's decision to hike the excise duty on petrol by Re 1 per litre and Rs 1.50 on diesel, the third increase this month, to mop up over Rs 3,200 crore in additional revenue, netting in all Rs 17,000 crore in three months. 

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Yes Bank has reported 25.07% rise in its net profit at Rs 675.74 crore for the third quarter as compared to Rs 540.29 crore for the same quarter in the previous year.
• Bank of Baroda has unveiled its Specialized Mortgage Store outfit 'Baroda SMS' in Mumbai at Sir PM Road, Fort, to cater to mortgage based retail business.
• ICICI Bank has reported 4.47% rise in its net profit at Rs 3018.13 crore for the third quarter as compared to Rs 2889.04 crore for the same quarter in the previous year.
• Maruti Suzuki India has reported 27.06% rise in its net profit after tax at Rs 1019.30 crore for the third quarter as compared to Rs 802.20 crore for the same quarter in the previous year.
• Bharti Airtel and Axiata Group Berhad have signed a pact to merge their respective telecommunication subsidiaries in Bangladesh; namely, Robi Axiata and Airtel Bangladesh.