Key equity indices ended the lackluster session of trade with marginal losses on Friday, as traders remained cautious ahead of US Federal Reserve Chairman Jerome Powell's big Jackson Hole speech that could bring a dovish surprise. Markets started the session on positive note but soon turned pessimistic as traders turned concern about a report that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. Some cautiousness also crept in with a private report that the Goods and Services Tax (GST) collections may come in as a surprise for the government as collections for the month of July are likely to be lower on both year-on year basis and a month-on-month basis. As per the report, collections may range between Rs 89,000 crore and Rs 91,000 crore for July which are to be reported in August. Traders took note of Niti Aayog vice chairman Rajiv Kumar's statement that India needs three-four large lenders to figure among top 200 global-sized banks. He also noted that India's banking sector is highly conservative. He made a strong case for giving banking sector more freedom to take risks and provide credit to industry especially the Micro, Small & Medium Enterprises (MSME) sector. However, losses remained capped as traders took some solace after Moody's Investors Service in its Global Macro Outlook for 2018-19 forecasted that India's gross domestic product (GDP) growth is likely to be around at 7.5% in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices. Some support also came with report that India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries. Traders also take note of the Commerce Ministry's statement that a National Logistics Portal is being developed to ensure ease of trading in the international and domestic markets, as India eyes lowering logistics cost from 14% of GDP to less than 10% by 2022. Finally, the BSE Sensex declined 84.96 points or 0.22% to 38,251.80, while the CNX Nifty was down by 25.65 points or 0.22% to 11,557.10.

The US markets closed higher with gains of over half a percent on Friday after Federal Reserve Chairman Jerome Powell affirmed the central bank's strategy of gradually normalizing monetary policy, highlighting the strength in the economy and robust corporate results that have helped to support investment appetite for equities. Powell said he sees two risks surrounding rate hikes, which he outlined as moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating. Besides, the strong results from retailers led the major indexes to slight weekly gains as investors also shook off renewed legal worries surrounding Trump. On the economic front, the Commerce Department released a report showing a much bigger than expected decrease in durable goods orders in the month of July. The Commerce Department said durable goods orders tumbled by 1.7% in July after climbing by 0.7% in June. Street had expected durable goods orders to drop by 0.5%. Excluding a significant decrease in orders for transportation equipment, durable goods orders rose by 0.2% in July after inching up by 0.1% in June. Ex-transportation orders had been expected to rise by 0.5%. Dow Jones Industrial Average rose 133.37 points or 0.52 percent to 25790.35, the S&P 500 gained 17.71 points or 0.62 percent to 2874.69 and Nasdaq was up by 67.52 points or 0.86 percent to 7945.98.

Crude oil futures ended higher on Friday as investors focused on tightening inventories, including signs of shrinking output from Iran. The US sanctions on Iran, which do not come into full force until November 4, are already translating into diminished production from the Islamic Republic weighed on prices. Iran numbers exports have already been reduced a bit. Initial estimates suggest that Iran oil crude and condensate exports have plummeted to 1.68 million barrels a day in the first 16 days of August, down over 600,000 barrels a day from loadings in July. Benchmark crude oil futures for October rose 89 cents or 1.3 percent to settle at $68.72 a barrel on the New York Mercantile Exchange. October Brent crude gained $1.09 or 1.5 percent at $75.82 a barrel on London's Intercontinental Exchange.

Snapping its previous session's losses, Indian rupee recovered against dollar on Friday, following heavy dollar selling from banks and exporters. Investors' sentiments turned positive with Moody's Investors Service in its Global Macro Outlook for 2018-19 forecasting that India's gross domestic product (GDP) growth is likely to be around at 7.5% in 2018 and 2019 as it is largely resilient to external pressures like those from higher oil prices. Besides, the dollar losing muscle against other currencies overseas too supported the rupee. On the global front, dollar fell on Friday ahead of a speech by the Federal Reserve's chairman which investors hope will provide an indication of the central bank's plans for monetary tightening and reaction to recent criticism by US President Donald Trump. Finally, the rupee ended at 69.91, 20 paise stronger from its previous close of 70.11 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 6422.81 crore against gross selling of Rs 6007.67 crore, while in the debt segment, the gross purchase was of Rs 981.15 crore with gross sales of Rs 291.49 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.19 crore against gross selling of Rs 0.89 crore.

The US markets rose on Friday, supported by remarks by Federal Reserve Chairman Jerome Powell, who said that a gradual process of interest rate increases remains appropriate as the US economy heats up and the labor market tightens. Asian markets were trading in green in early deals on Monday, taking support from Wall Street's gains on Friday. The Indian markets snapped four-session winning streak on Friday to end the day with marginal losses, amid escalating trade tensions between the US and China as talks between the two countries ended without any significant outcome. Today, the start of the F&O expiry week is likely to be a bit positive following firm global cues. Traders may take note of a report that former Niti Aayog vice-chairman Arvind Panagariya opined that rupee depreciation was long overdue, saying appreciated currency had hurt the country's exports. He further said India's macroeconomic management is sound and there was no reason to worry. Besides, the government is looking to complete nearly three-fourths of its disinvestment target by the end of December and has a pipeline of about 15 companies in which it will sell stakes to achieve this interim goal. Meanwhile, the second phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) India scheme will be kicked off on September 7, 2018, by Prime Minister Narendra Modi. Under Phase II of the initiative, the government has earmarked a budget of Rs 5500 crore to be used over the next five years and will be used to provide subsidies to all types of electric vehicles. However, there may be some cautiousness with the Reserve Bank of India's (RBI) data showing that India's foreign exchange (Forex) reserves slipped by $33.2 million during the week ended August 17. Also, traders will be concerned about a private report that high borrowing costs and weakness in rupee is expected to impact corporates, while uncertainties in the global market has the potential to derail the global growth story. There will be some buzz in the real estate related stocks with ICRA's report that the adoption of new accounting standard IndAS has dented the net-worth of nine major listed real estate firms by 18% and revenues by 23.6% sequentially in June quarter.

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

Nifty Top volumes

• Coal India's sales to power sector increased by 13% on-year to 186.92 million tonne (MT) between April 1 and August 22, 2018. 
• Vedanta is planning to expand its alumina refinery at Lanjigarh in Odisha to 6 million tonnes per annum by 2021. 
• ICICI Bank has agreed to a multi-year partnership with Manchester United, bringing a range of competitive co-branded credit and debit card to the club's 35 million Indian followers. 
• Lupin has received the EIR from USFDA for the successful inspection of its Nagpur facility.