A session after displaying a distressing performance, Indian equity indices have managed to pull through a dazzling performance by gaining over half a percent on Thursday, thanks to encouraging corporate earnings and a string of government reforms, including NPA package for banks and national steel policy. The government has approved a new policy that envisages Rs 10 lakh crore investment to create more capacity in the steel sector. The policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and production of 300 million tonnes of the alloy by 2030-31. Investors' sentiments also got boost after the US Federal Reserve kept its policy rate unchanged in its two-day policy review. Some support also came with the report that services sector grew for the third straight month in April 2017, though the pace of growth moderated amid slower rise in new business and employment. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector output on a monthly basis, was down from 51.5 in March to 50.2 in April, indicating challenging market conditions that hampered growth. A reading above 50 on the index denotes expansion, while one below the benchmark indicates contraction. Meanwhile, shares of PSU banks surged after Cabinet approved new non-performing assets (NPA) policy to deal with stressed assets. The framework includes the promulgation of an ordinance to amend the Banking Regulation Act to give more teeth to the Reserve Bank of India (RBI) and its oversight committees to act on behalf of banks while deciding on NPAs. The proposals are now awaiting the President's assent. Moreover, Bank Nifty ended record high, supported by ICICI Bank that rallied over nine percent post earnings. Finally, the BSE Sensex gained 231.41 points or 0.77% to 30126.21, while the CNX Nifty was up by 47.95 points or 0.51% to 9,359.90.

The US markets o9nce again made a flat closing on Thursday, extending the lackluster performance seen over the past several sessions, as traders looked ahead to the release of the Labor Department's closely watched monthly jobs report on Friday. Employment is expected to increase by 180,000 jobs in April after rising by 98,000 jobs in March. On the economic front, a report released by the Labor Department showed that first-time claims for unemployment benefits fell by more than anticipated in the week ended April 29th. The initial jobless claims dropped to 238,000, a decrease of 19,000 from the previous week's unrevised level of 257,000. A a separate report showing an unexpected drop in labor productivity in the first quarter along with a bigger than expected jump in unit labor costs. The Labor Department said productivity fell by 0.6 percent in the first quarter after surging up by a revised 1.8 percent in the fourth quarter. Economists had expected productivity to come in unchanged. Also, a Commerce Department released a report showing that the trade deficit was little changed in March amid drops in both imports and exports. It said the trade deficit narrowed to $43.7 billion in March from a revised $43.8 billion in February. The trade deficit had been expected to widen to $44.5 billion. The Dow Jones Industrial Average was down by 6.43 points or 0.03 percent to 20,951.47, while the Nasdaq added 2.79 points or 0.05 percent to 6,075.34 and the S&P 500 ended up by 1.39 points or 0.1 percent to 2,389.52.

Crude oil futures suffered sharp slump on Thursday, just after a day of showing some recovery sign, as investors' concerns about the glut in crude stockpiles heightened, ahead of the OPEC meeting on May 25. It was the worst daily drop for oil prices in 2017. There were reports that talks between rival Libya factions “made some progress,” potentially ending supply interruptions from the North African nation. Libya's crude production rebounded to more than 700,000 barrels a day, it was recently reported. Oversupply jitters returned as producers, who are not part of the deal to curb supply, the U.S. in particular, ramped up output, which has dampened OPEC's effort to reduce global supply. Benchmark crude oil futures for June delivery slumped by $2.30 or 4.8 percent to $ 45.52 on the New York Mercantile Exchange. In London, Brent crude for June delivery ended lower by $ 4.75 percent at $48.38 on the ICE.

Snapping two-day winning streak, Indian rupee ended marginally weaker against dollar on Thursday, on fresh demand for the American currency from banks and importers. Sentiments remained weak with a private survey showing that growth in India's dominant services industry came close to stalling in April, as new orders slowed to a trickle, forcing companies to spend more on aggressive advertising campaigns as they fought for business. Besides, dollar's strength against some other currencies overseas weighed on the sentiments, but a firm domestic equity market cushioned the impact. On the global front, dollar rose to fresh six-week highs against yen on Thursday, boosted by bets for more rate hikes by the Federal Reserve this year, while the euro and sterling rose, lifted by robust service sector reports. Finally, the rupee ended at 64.17, 2 paise weaker from its previous close of 64.15 on Wednesday.

The FIIs as per Thursday'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 4033.05 crore against gross selling of Rs 4126.52 crore, while in the debt segment, the gross purchase was of Rs 492.67 crore with gross sales of Rs 339.69 crore.

The US markets remained in consolidation mood and made another flat closing in the last session. Traders were eyeing the monthly jobs report to be released on Friday for further cues; however the economic reports remained mixed. The Asian markets have made a mixed start, with the Chinese market sliding for the fourth consecutive day, approaching near a level that would wipe out all of this year's gains. The Indian markets outperforming all the global markets rallied in the last session, supported by some domestic reform measures by the government. The Banking pack surged to new high after Cabinet approved new non-performing assets (NPA) policy to deal with stressed assets. Today, the start of the day is likely to be a bit soft and cautiousness may creep in tailing the weakness in other global markets, as concerns over Indian stocks' rich valuations have heightened. Markets however, may get some support with Confederation of Indian Industry (CII) President Shobana Kamineni's statement that India can achieve a gross domestic product (GDP) growth of 10 percent by fiscal year 2019-20 on the back of tremendous opportunities available in the economy. She added that the drivers for this step up in growth would include the benefits from implementation of GST, and greater participation of women in the labour force. Meanwhile, the Asian Development Bank (ADB) has lauded Prime Minister Narendra Modi's effort of integrating indirect taxes through the GST, even as it wants the Indian market to be more “deregulated” and FDI friendly to realise the true potential. The banking stocks will continue to be in action, as the President Pranab Mukherjee is likely to promulgate the ordinance giving greater powers to the Reserve Bank to tackle mounting bad loans. The gold and jewellary stocks too will be reacting to the report from the World Gold Council, which has said that the uptake for gold in India for January-March this year was 124 tonnes, up 15% compared with the overall demand for the same period in 2016. There will be lots of important earnings announcements and reaction based on them to keep the markets buzzing.

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

Nifty Top volumes

• L&T Technology Services, the IT services arm of the engineering major Larsen & Toubro, has signed an agreement to acquire US-based design services provider Esencia Technologies Inc.
• Maruti Suzuki India has reported 6.61% rise in its production to 1,33,457 units in April 2017 as compared to 1,25,186 units in April 2016.
• ICICI Bank has reported 5-fold jump in its consolidated net profit at Rs 2,082.75 crore for the quarter ended March 31, 2017 as compared to Rs 406.71 crore for the corresponding quarter in the FY16. 
• Tata Power Company has launched Chatbot for enhancing customer service.