Indian benchmarks showcased an astounding performance on Friday and went on to outclass indices around the world by surging over half a percent and settling above the psychological 8,800 (Nifty) and 28,450 (Sensex) levels. Thursday's optimism got spilled over into the today's session helping the frontline indices in extending the winning momentum for second successive session. Sentiments remained sanguine as Reserve Bank of India (RBI) governor Urjit Patel said India is at a 'good place' in terms of financial stability and the central bank will manage any sharp volatility in the markets arising out of global developments including concerns over U.S. President Donald Trump's protectionist policies. He also said RBI is looking beyond the headline inflation figures and is focusing on core inflation trends, which excludes more volatile food and fuel prices, to guide RBI's policy moves. Further, Investors' morale also remained upbeat as Arjun Ram Meghwal, Minister of State for Finance said that the ongoing digital push and encouragement of cashless transactions would boost the country's gross domestic product (GDP). He also said that India was on the verge of a transition from a large cash economy to a less cash and digital economy. However, weak global cues coupled with depreciation in rupee value have limited the gains. Indian rupee fell 8 paise to 67.15 against the US currency on Friday on increased dollar demand from importers and banks. Some investors remained nervous with Nomura's report that the impact of demonetisation is still visible and cash levels in the economy are not expected to be sufficient until March, which may keep trade volumes depressed for the next two months. As per data released by the commerce ministry, growth in exports in January was lower than 5.72% in December. Furthermore, India Ratings and Research (Ind-Ra) does not expect the performance of Indian companies to improve substantially in FY18. Pick-up in capital expenditure by the private sector is at least another two fiscal years away. Rise in commodity prices and uptick in interest rates amid rate hikes globally are two important risks to slow-but-improving demand for FY18. Finally, the BSE Sensex gained 167.48 points or 0.59% to 28468.75, while the CNX Nifty was up by 43.70 points or 0.50% to 8,821.70. 

The US markets closed higher on Friday, with all three major indexes closing at record high. The euphoria surrounding President Trump's proposed economic policies - fueled by optimism around the prospect of tax cuts and increased infrastructure spending - have helped to push US stocks to all-time highs even as some of the enthusiasm had faded in recent days. The sentiment on Wall Street generally points to more upside for stocks once investors have a clearer picture of Trump's plans for tax reform and the health-care overhaul even as the market goes through periodic corrections. On the economy front, the US leading economic index had its second strong increase since the election and if the trend continues it could point to acceleration in economic growth. The leading economic index for the US rose 0.6% in January after a 0.5% gain in December. That's the fastest pace since June 2015. Among the 10 indicators that make up the Conference Board's gauge, eight made positive contributions in January, led by the interest-rate spread, building permits and average weekly jobless claims. The coincident index, which measures current conditions, rose 0.1% in January, while the lagging index advanced by 0.3%. The Dow Jones Industrial Average added 4.28 points or 0.02 percent to 20,624.05, the Nasdaq was up 23.68 points or 0.41 percent to 5,838.58, while S&P 500 gained 3.94 points or 0.17 percent to 2,351.16. 

Crude oil futures though managed a modestly positive close on Friday but suffered the first weekly decline in five weeks. Meanwhile, the trade remained range bound and lacklusture for the day as traders weighed up OPEC's effort to reduce supply against the rise in crude inventories to record high levels. Further gains were capped following a spike in the dollar and an increase in U.S. weekly rig counts, after oilfield services firm Baker Hughes reported its weekly count of US oil rigs in operation rose by 6 to a total of 597. Slumping demand for gas at higher prices also weighed on oil prices. Benchmark crude oil futures for March delivery gained $0.04 or 0.08 percent to $53.40 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended up by $0.08 or 0.15 percent at $55.74 on the ICE.

Indian rupee ended marginally stronger against the US dollar on the last trading day of the week due to selling of greenback by banks and importers. Domestic currency got some support with Reserve Bank of India (RBI) governor Urjit Patel's statement that India is at a ‘good place' in terms of financial stability and the central bank will manage any sharp volatility in the markets arising out of global developments including concerns over U.S. President Donald Trump's protectionist policies. Besides, positive gains in the equity market along with dollar struggle against some other currencies overseas too supported the rupee. On the global front, pound slipped against dollar for the first time in several weeks after a troublingly poor set of retail sales figures. Finally, the rupee ended at 67.02, 5 paise stronger from its previous close of 67.07 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 5085.23 crore against gross selling of Rs 5281.60 crore, while in the debt segment, the gross purchase was of Rs 337.65 crore with gross sales of Rs 314.11 crore.

The US markets ended at fresh record highs despite a choppy session, although traders seemed somewhat reluctant to make significant moves, to get a head start on the long holiday weekend. The Asian markets have made mostly a positive start taking cues from the US markets, though the Japanese index was down for a third straight session after the yen dropped after a three-day gain. The Indian markets extended their gains in last session to close near five-month highs, despite uncertainties over the US fiscal and monetary policies. Today, the start of the F&O series expiry week is likely to be flat-to-cautious. Traders will be reacting to the news that the GST Council in a meeting during weekend cleared the law for compensating states for loss of revenue that they may incur during implementation of Goods and Service Tax. The council's nod has paved the way for the law to be tabled in Parliament in the second half of the budget session beginning 9 March. There will be buzz in the telecom sector on reports that Reliance Communications and the Tata Group have initiated talks to explore a possible union that could see Tata Teleservices joining forces with the merged RCom-Aircel and MTS. Meanwhile, Telecom regulator TRAI will review the rules of tariff assessment with regard to promotional offers and predatory pricing, issues that have triggered a public spat between Reliance Jio and incumbent operators. Banking stocks too will keep buzzing with an Arcil official stating that once the Insolvency and Bankruptcy Bill is passed, the sale of bad loans to asset reconstruction companies (ARCs) could improve substantially to 30-35 per cent of the loans put on the block by banks and financial institutions from the current 10-15 per cent.

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

Nifty Top volumes

• Tata Motors has entered into a strategic agreement with Microsoft India to redefine connected and personalized driving experiences for Indian customers.
• NTPC has flagged off the first rake of coal on February 16, 2017 from its Pakri Barwadih coal mine located in the state of Jharkhand.
• Mahindra & Mahindra has introduced 7 new products simultaneously under its Supro platform. 
• Lupin has received USFDA approval for ANDA Hydrocodone Bitartrate and Homatropine Methylbromide Oral Solution, 5 mg/1.5 mg per 5 ml, Generic of Hycodan Oral Solution, 5 mg/1.5 mg per 5 mL, of Endo Pharmaceuticals, Inc.
• Bharti Airtel has rolled out an upgraded state-of-the-art 4G network across Maharashtra and Goa to deliver best-in-class mobile broadband experience to customers, with faster data speeds and better indoor and outdoor coverage.