Friday turned out to be a remarkable day of trade for Indian equity benchmarks where bulls tightened their grip on Dalal Street, with Sensex conquering its crucial 35,500 level, Nifty end just shy of 10,900 mark for the first time ever. Despite some initial hiccups, domestic bourses gained momentum and traded in green terrain for most part of the day, but rally in last leg of trade mainly helped markets to end at fresh record high levels. Sentiments remained up-beat, as traders took some encouragement with India Ratings and Research's projection that the country's economic growth will improve to 7.1 percent in the next fiscal year 2018-19 from 6.5 percent in the current year 2017-18. It said that the growth will be supported by robust consumption demand and low commodity prices. Traders also reacted positively on report that GST Council decided to cut tax rates on 29 products and 53 services, in what is seen as the biggest overhaul since the launch of GST. Finance Minister Arun Jaitley also said that the panel at its next meeting may also consider bringing under the Goods and Services Tax (GST) purview items like petroleum and real estate which are currently outside the new regime. At one point of time it looked like markets will end up near neutral lines, but rally which emerged in final hour of trade mainly pulled markets higher to end at their fresh all time high levels. Sentiments remained optimistic with Union Minister Suresh Prabhu's statement that the commerce ministry is working on a strategy to diversify India's export basket in a bid to boost shipments. Some support also came with Vice-President M Venkaiah Naidu's statement that various decisions of the central government, including demonetisation and GST, are likely to have a positive impact in the coming years. Finally, the BSE Sensex surged 251.29 points or 0.71% to 35,511.58, while the CNX Nifty was up by 77.70 points or 0.72% to 10,894.70.

The US markets closed higher on Friday, with both the S&P 500 and the Nasdaq ending at record high, as optimism over corporate earnings outweighed the threat of a government shutdown. While a shutdown is seen as having little impact on the pace of economic growth, such an outcome would add another element of uncertainty to a market that is already seen as trading at lofty levels, and which hasn't seen even a mild decline in more than a year. On the economy front, the University of Michigan's consumer sentiment index fell in January to a reading of 94.4, the worst reading since July. Consumers assessed the current condition as worsening, though they were a touch more optimistic about the future. The report said less attractive pricing was the culprit.  Consumers are still confident about future buying plans, and this survey suggests the public thinks tax cuts will help them to some extent. The Dow Jones Industrial Average added 53.91 points or 0.21 percent to 26,071.72, the Nasdaq gained 40.333 points or 0.55 percent to 7,336.38, and the S&P 500 edged higher by 12.27 points or 0.44 percent to 2,810.30.

Crude oil futures turned weak on Friday, as OPEC fretted that US oil output would remain robust in 2018 after the International Energy Agency on Friday said it sees "explosive" growth in US oil output in 2018. Meanwhile, the Organization of Petroleum Exporting Countries, which will meet in Oman this weekend to review its strategy, is sticking to its production curbs. Nymex crude slid around a percent to the lowest level in more than a week and posted the first weekly loss since mid-December. Traders though, overlooked the oil services firm Baker Hughes report which said that the US oil rig count fell by 5 rigs to 747. Benchmark crude oil futures for February delivery ended lower by $0.58 at $63.37 a barrel on the New York Mercantile Exchange. Brent crude for March delivery was down by 0.70 cent to $68.61 a barrel on the ICE.

Indian rupee gave up most of its intraday gains and managed a modestly positive close on Friday, on back of selling of American currency by banks and exporters. Investors took support with the rating agency, Ind-Ra's projection that the country's economic growth will improve to 7.1 percent in the next fiscal year 2018-19 from 6.5 percent in the current year 2017-18, supported by robust consumption demand and low commodity prices. Some support also came with Vice-President M Venkaiah Naidu's statement that various decisions of the central government, including demonetisation and GST, are likely to have a positive impact in the coming years. Besides, splendid gains of local equities along with dollar's slide against some currencies overseas, too supported the rupee. On the global front, dollar wallowed near three-year lows on Friday as heightened fears of a US government shutdown unnerved investors.  Finally, the rupee ended at 63.84, 3 paise stronger from its previous close of 63.87 on Thursday.

The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 9015.80 crore against gross selling of Rs 7097.88 crore, while in the debt segment, the gross purchase was of Rs 3182.71 crore with gross sales of Rs 1902.89 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.30 crore against gross selling of Rs 5.91 crore.

The US markets ended higher on Friday, as traders remained optimistic about the outlook for the economy and corporate earnings overshadowed concerns about a government shutdown at midnight. Traders also overlooked report from the University of Michigan showing an unexpected deterioration in consumer sentiment in the month of January. Asian markets have made a mixed start, as investors kept an eye on political developments in the U.S. after a government shutdown began last week. The Indian markets traded with traction and ended the last session at their record closing high levels amid reports that GST Council decided to cut tax rates on 29 products and 53 services, in what is seen as the biggest overhaul since the launch of GST. Today, the start is likely to be slightly in green, as traders may take some encouragement with report that overseas investors have put in a whopping Rs 87 billion in the Indian capital markets this month so far on expectation of recovery in corporate earnings and attractive yields. This follows an investment of Rs 2 trillion in the capital markets (equity and debt) in the entire 2017. Some support may also come with IMF Chief Christine Lagarde and Norway's Prime Minister Erna Solberg's statement that raising women's participation in the labour force to the same level as men can boost India's GDP by 27 per cent. Meanwhile, telecom stocks will be in focus with the Department of Telecom (DoT) keeping an open mind on the timing of the next round of spectrum auction and will await regulator Trai's report before firming its views. Steel stocks will also be buzzing on report that the steel ministry is in talks with Railways to ensure adequate availability of rakes for industries that have been saying the problem has led to a shortage of raw materials at plants. There will lots of important earnings announcements to keep the market buzzing for the day.

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

Nifty Top volumes

• Tech Mahindra has received an approval to acquire shareholding in Altiostar Networks, Inc., USA through its Wholly Owned Subsidiary - Tech Mahindra Inc, USA.
• Yes Bank has entered into a pact with Amplus Energy Solutions for strategic tie-up to co-finance projects in the solar energy space in India. 
• Tata Steel has announced a successful dual tranche Reg S issuance of $1.3 billion of unsecured bonds in the international markets.
• HDFC Bank has reported 20.11% rise in its net profit at Rs 4642.60 crore for Q3FY18 as compared to Rs 3865.33 crore for Q3FY17.