Thursday's session turned out to be a disaster for the Indian benchmarks which crumbled like a ‘house of cards' and went on to breach various key technical levels in the over three percent freefall. The frontline indices which appeared to be on a southbound journey, desperately kept searching for a bottom through the session, but to no avail as the journey only halted with the session's close. Sentiments got undermined after US Federal Reserve chair Janet Yellen in a testimony to Congress stated that global economic turmoil and massive sell-off in global equity markets could spook the US economy, but showed faith in the US economy, rekindling hopes that there will be further rate hikes during the rest of the year. On the domestic front, sentiments remained somber with the report that foreign institutional investors' (FIIs) shareholding in Indian companies dropped to lowest level in nearly three years at the end of December quarter. Percentage of FII holding in 1,000-odd companies listed on the NSE stood at 18.67%, lowest since March 2013. Besides, decline in the rupee coupled with a slide in the crude oil prices also dented the sentiments. Indian rupee again breached the 68-mark as it fell by 17 paise to 68.02 against the American currency, as the demand for dollar from banks and importers gathered pace, while Oil prices slid as record US crude inventories and worries about a global economic slowdown. Meanwhile, cautiousness ahead of the release of Industrial production figures for the month of December and Retail inflation data for the month of January, also kept market-participants on the tenterhooks. On the global front, European markets made an awful start, while Asian markets ended mostly in the red. Back home, the benchmark got off to a weak start and the indices breached the psychological 7,200 and 23,600 levels in the early moments of trade since investors largely remained influenced by the pessimistic sentiments prevailing in Asian markets. Thereafter, the frontline indices lost the plot and kept tumbling down the hill without any stoppage. The steep fall turned even acute after the opening of European markets in the noon trades, as one negative report after another from the continent kept creating havoc for the local bourses. Finally, the BSE Sensex slumped by 807.07 points or 3.40% to 22951.83, while the CNX Nifty plunged by 239.35 points or 3.32% to 6,976.35. 

The US markets closed lower on Thursday, falling amid a global rout led by tumbling oil prices and losses in financial stocks. The main indexes tried to stage a comeback in late-afternoon trade, after the oil minister of the United Arab Emirates stated that the Organization of the Petroleum Exporting Countries are ready to cooperate on a production cut. But the remarks, reported by The Wall Street Journal, weren't enough to sustain the rebound. Remarks from Federal Reserve Chairwoman Janet Yellen during her second day of testimony on Capitol Hill, meanwhile, didn't help lift investor sentiment. On the economy front, the number of people who applied for unemployment benefits in early February fell to the lowest level in almost two months, a reassuring sign that few workers are losing their jobs despite a slowdown in hiring. Initial jobless claims declined by 16,000. The Dow Jones Industrial Average lost 254.56 points or 1.60 percent to 15,660.18, the Nasdaq was down 16.75 points or 0.39 percent to 4,266.84 while, the S&P 500 was down by 22.78 points or 1.23 percent to 1,829.08.  

Crude oil futures continued their decline and ended at fresh 12-year lows on Thursday, amid a bearish monthly supply report from OPEC and further indications that a deal between Russia and the world's largest oil cartel on potential cuts in production will not materialize. Meanwhile, the US Energy Department's EIA believes worldwide crude stocks could increase by an average 1 million barrels a day this year even as non-OPEC crude production dwindles, which also weighed on the sentiments. Benchmark crude oil futures for March delivery declined by $1.27 or 4.54 percent to $26.14 a barrel after trading in a range of $26.12 and $27.48 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $29.98, down by $0.86 or 2.83 percent on the ICE.

India rupee ended substantially weaker against dollar on Thursday due to strong demand for the American unit from importers and banks. Despite dollar's weakness against the basket of major currencies overseas, the domestic currency fell below the crucial 68-mark. The massive sell off in the Indian and global markets also added to pessimistic environment. Meanwhile, investors remained cautious ahead of the release of Retail inflation and IIP data on February 12. Further sentiments got undermined with the report that India continues to report over 7 per cent GDP growth, but its momentum has weakened and the country's growth is well ‘below trend'. On the global front, the dollar hit a 15-month low against the yen after comments from Federal Reserve Chair Janet Yellen gave investors no reason to change their minds that the next rate hike will be a long time coming. Finally, the rupee ended at 68.30, 45 paise weaker from its previous close of 67.85 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3758.97 crore against gross selling of Rs 4264.18 crore, while in the debt segment, the gross purchase was of Rs 146.47 crore with gross sales of Rs 395.97 crore.       

The US markets despite late day recovery ended lower in last session, with Dow ending the session at a two-year closing low. Traders largely shrugged off a report from the Labor Department showing a bigger than expected decrease in initial jobless claims in the week ended February 6th. The Asian markets have made mostly a lower start, led by the Japanese market which is down by around five percent, heading for their worst week since 2008 as anxiety over central banks' ability to revive the world economy fueled a rally in the yen. The Indian markets slumped in last session on global growth worries and weak earnings from some of the major companies. Today, the start of the final day of the week is likely to remain weak, however some lower level buying can appear later in the day and markets will see some recovery after deep gash of last session. Traders are likely to get some support with Reserve Bank of India (RBI) Governor Raghuram Rajan's statement that the ongoing clean-up of bank balance sheets will help spur economic growth and improve the lenders' profitability. He has also said that while the profitability of some banks may be impaired in the short-run, the system, once cleaned, will be able to support economic growth in a sustainable and profitable way. Also, the RBI assured banks that it would inject adequate cash in view of the tight liquidity conditions in the market. Meanwhile, India Ratings and Research has said that the country needs to raise its labour productivity growth to 7.3 percent to attain a GDP growth rate of 9 percent. There will be lots of major companies reporting their numbers that will keep the markets buzzing for the day.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Bank of India has reported a net loss of Rs 1505.58 crore for the quarter ended December 31, 2015 as compared to net profit of Rs 173.38 crore for the same quarter in the previous year.
• Outbidding competitors in an open global tender, Bharat Heavy Electricals has bagged order for the supply of two 800 MW Steam Generators with supercritical parameters.
• Cipla has reported 11.03% fall in its net profit at Rs 265.98 crore for the quarter ended December 31, 2015 as compared to Rs 298.95 crore for the same quarter in the previous year.
• Diversified conglomerate ITC is exploring possibility to enter into the branded frozen foods segment.
• Tata Motors has reported 16% increase in its global sales, including that of Jaguar Land Rover vehicles, at 93,355 units in January as compared to 80,499 units sold in January 2015.