Friday turned out to be a disappointing day of trade for Indian equity benchmarks where key gauges ended the session marginally in red. Markets started the session on an optimistic note as traders took some encouragement with report highlighting that the direct tax collections jumped by nearly 20 per cent between April and February this fiscal as the Income-Tax Department races to meet its full year targets. The net direct tax receipts grew by a hefty 19.5 per cent in the first 11 months of the fiscal amounting to Rs 7.44 lakh crore. Net corporate income tax collections increased by 19.7 per cent in the period, while personal income tax receipts grew by 18.6 per cent. Some support also came with Economic Affairs Secretary Subhash Chandra Garg's statement that the 7.2 per cent expansion in the economy during October-December quarter has put the country in one of the highest growth bracket in the world and recovery will continue to be sharp going ahead. The third quarter growth of 7.2 per cent was highest in five quarters. The previous high was recorded at 7.5 per cent in the July-September quarter of 2016-17. But, sell off in last leg of trade played spoil sports for domestic markets and dragged the key gauges in red terrain, as anxiety spread among the investors with a private report stating that India Inc has nearly 1.8 lakh crore of cash trapped in their balance sheet as working capital situation worsens on account of increase in inventory levels. The report also found that the cash conversion cycle has deteriorated by 4percent from FY16, to 44 days in FY17. Traders also remained cautious with Indian Steel Authority's report that US President Donald Trump's move to hike import tariffs on steel will adversely hit India's local markets. Traders took note of another private report that Indian retail inflation likely to eased to a four-month low in February on softening prices for vegetable and other perishable foods, but probably stayed above the Reserve Bank of India's target. Finally, the BSE Sensex shed 44.43 points or 0.13% to 33,307.14, while the CNX Nifty was down by 15.80 points or 0.15% to 10,226.85.

The US markets rallied on Friday after the Labor Department released a report showing much stronger than expected job growth in February. The non-farm payroll employment surged up by 313,000 jobs in February after jumping by an upwardly revised 239,000 jobs in January. The street had expected employment to climb by 200,000 jobs, matching the increase originally reported for the previous month. Despite the stronger than expected job growth, the unemployment rate held at 4.1 percent in February. The unemployment rate had been expected to dip to 4.0 percent. The report also said the annual rate of growth in average hourly employee earnings fell to 2.6 percent in February from 2.8 percent in January. The markets also benefited from easing geopolitical concerns amid news President Donald Trump has agreed to meet with North Korean leader Kim Jong-Un. Trump said, “Kim Jong Un talked about denuclearization with the South Korean Representatives, not just a freeze. Also, no missile testing by North Korea during this period of time.” The meeting between Trump and Kim would be the first between a sitting U.S. president and a North Korean leader. The Dow Jones Industrial Average surged 440.53 points or 1.77 percent to 25335.74, Nasdaq gained 132.86 points or 1.79 percent to 7560.81, and the S&P 500 was up by 47.60 points or 1.74 percent to 2786.57.

Crude oil futures edged higher on Friday amid data showing the U.S. rig count dropped for the first time in seven weeks. Baker Hughes said that the number of active U.S. rigs drilling for oil fell by four to 796 this week, suggesting the possibility of a fall in future output. It was the first such decline in seven weeks. Meanwhile, possibility of a meeting between U.S. President Donald Trump and North Korea's leader also prompted investors to take some geopolitical risk out of the equation for the crude market. Benchmark crude oil futures for April delivery surged $1.92 or 3.2 percent at $62.04 a barrel on the New York Mercantile Exchange. May Brent crude increased by $1.88 or 3 percent to settle at $65.49 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against US dollar on Friday, due to fresh demand for the American currency from banks and importers. Investors remained cautious with a private report that Indian retail inflation likely to stay above the Reserve Bank of India's target. But it also said that inflation may eased to a four-month low in February on softening prices for vegetable and other perishable foods. Besides, selling in last hour of trade in the domestic equity markets, too weighed on the rupee sentiment. However, losses were limited as some support came with Economic Affairs Secretary Subhash Chandra Garg's statement that the 7.2% expansion in the economy during October-December quarter has put the country in one of the highest growth bracket in the world and recovery will continue to be sharp going ahead. On the global front, US dollar inched up against yen on Friday amid eased geopolitical concerns after US President Donald Trump agreed to meet Kim Jong Un, top leader of the Democratic People's Republic of Korea (DPRK). Finally, the rupee ended at 65.16, 2 paise weaker from its previous close of 65.14 on Thursday.

The FIIs as per Friday's data were net buyers in equity segment, while they were net sellers in debt segment, in equity segment, the gross buying was of Rs 6795.45 crore against gross selling of Rs 5634.97 crore, while in the debt segment, the gross purchase was of Rs 462.10 crore with gross sales of Rs 2264.07 crore. Besides, in hybrid segment, the gross buying was of Rs 1.13 crore against no selling.

The US markets edged higher on Friday as geopolitical tensions eased after North Korean leader Kim Jong Un had offered to halt nuclear and missile tests and expressed his desire to meet with U.S. President Donald Trump through South Korean national security adviser Chung Eui-yong. Asian stocks got off to a strong start on Monday, tracking stateside gains in the last session on expectation-topping jobs data. Indian markets ended lower on Friday as banking stocks once again succumbed to heavy selling pressure in last leg of trade. Today, markets are likely to make strong start tracking firm global cues. Traders will be eyeing foreign fund inflows and macro-economic data on inflation and industrial production to be released later this week. Traders will get some encouragement with IMF stating that the Indian economy now seems to be on its way of recovering from disruptions caused by demonetisation and roll-out of goods and services tax. At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of the banking and financial systems. Traders will also get some support with industry body FICCI's report that manufacturers in the country have a positive outlook for the sector in the January-March quarter on the back of higher production. The proportion of respondents reporting higher output growth during the Q4 2017-18 has increased significantly to 55 per cent from 47 per cent in Q3. Some support may also come later in the trade on report that the Centre is expected to get around Rs 8,044 crore on account of dividend from Coal India as the miner's board approved payment of interim dividend for the financial year 2017-18 at a rate of Rs 16.50 per share. The miner's total payout on account of this would be to the tune Rs 10,242 crore. There will be buzz in infrastructure related stocks after NHAI has said that it will strive to construct 1,100 km of highways this month to achieve its target of building 3,500 km in the ongoing fiscal. Stocks related to dairy space will be buzzing with report that milk production in the country increased by 20 per cent from 137.7 million tonnes to 165.4 million tonnes between 2014 and 2017.

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

Nifty Top volumes

• Royal Enfield, the two-wheeler division of Eicher Motors, has entered into a pre-owned motorcycle segment with the launch of first such store Vintage in Chennai. 
• Bharti Airtel will raise Rs 3,000 crore through listed, unsecured, rated, redeemable, non-convertible debentures through private placement. 
• ONGC may sell stake in its mega petrochemical project in Gujarat to fund acquisition of HPCL. 
• The USFDA has issued Form 483 with five observations to an API plant of Dr Reddy's Laboratories.