Extending northward journey for second straight session, Indian equity benchmarks staged a strong rally on Thursday and ended with gains of over one and half percent each, on the back of a broad-based buying interest led by gains in banking, financial services, telecom and private banking shares. Investor sentiment was boosted as the government's move to allow opening of multiplexes incited hopes of a faster economic recovery. Key gauges made gap-up opening, taking support from the Reserve Bank of India's (RBI) statement that India's current account balance (CAB) recorded a surplus of $19.8 billion -- 3.9 percent of GDP -- in the June quarter of FY21, up from the surplus of $0.6 billion in the preceding quarter (Q4FY20), on the back of lower trade deficit. Trading sentiments remained optimistic with Commerce and Industry Minister Piyush Goyal's statement that the government is opening up the economy for greater participation of the private sector and has been working in different ways to remove entry barriers for new investments. He said the government has opened up defence manufacturing for the domestic industry in a much bigger way and coal mining for commercial engagement. Markets extended their upward momentum in second half of the session, as the survey report showed India's manufacturing sector activity improved for the second straight month in September and touched an over eight-and-a-half-year high supported by accelerated increases in new orders and production, even as firms reduced staff numbers. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) increased from 52.0 in August to 56.8 in September -- highest since January 2012. Additional support also came with the RBI's report stated that India's external debt stood at $554.5 billion at end-June, recording a decrease of $3.9 billion over its level at the end of March 2020. A sharp appreciation in the rupee against the US dollar added to the momentum. Indian rupee settled at 73.13 against the US dollar, registering a surge of 63 paise over its previous close. Traders overlooked data showed that the growth of eight core infrastructure industries contracted by 8.5 percent in August 2020 as compared to same period of last year, mainly due to a decline in the production of steel, refinery products and cement. Finally, the BSE Sensex rose 629.12 points or 1.65% to 38,697.05, while the CNX Nifty was up by 169.40 points or 1.51% to 11,416.95.

The US markets ended lower on Friday amid report that President Donald Trump and First Lady Melania Trump have tested positive for the coronavirus. The news comes just a month before Election Day and has led to additional uncertainty about the outcome of the presidential election. White House physician Dr. Sean Conley said the president and first lady were both well at this time, and they planned to remain at home within the White House during their convalescence. Conley added that he expects Trump to continue carrying out his duties without disruption while recovering. A report from the Labor Department showing US job growth slowed by much more than anticipated September also weighed on Wall Street. The Labor Department said non-farm payroll employment rose by 661,000 jobs in September after spiking by an upwardly revised 1.489 million jobs in August. Street had expected employment to increase by 850,000 jobs compared to the jump of 1.371 million jobs originally reported for the previous month. However, the markets attempted to recover from an initial sell-off as traders speculated Trump's diagnosis and the disappointing data could put further pressure on lawmakers to pass a new stimulus bill.

Crude oil futures settled sharply lower on Friday, on worries about the outlook for energy demand amid reports of sharp spikes in coronavirus cases in several countries and fresh lockdown restrictions. US President Donald Trump revealing that he and First Lady Melania Trump tested positive for the coronavirus further hurt oil prices. Rising supply levels and data showing a slower than expected growth in US employment also weighted down on prices. The Labor Department said non-farm payroll employment rose by 661,000 jobs in September after spiking by an upwardly revised 1.489 million jobs in August. Meanwhile, a report from Baker Hughes said the number of active US rigs drilling for oil rose by 6 to 189 this week after seeing an increase of 4 rigs in the previous week. Crude oil futures for November fell $1.67 or 4.3 percent to settle at $37.05 a barrel on the New York Mercantile Exchange. December Brent crude declined $1.12 or 2.7 percent to settle at $39.81 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly higher against dollar on Thursday, extending its previous session's gains, after the greenback eased against its global peers following robust US data and stimulus hopes. Besides, healthy growth in the domestic equity markets added to the rupee gains. Sentiments remained positive, as India's manufacturing sector activity improved for the second straight month in September and touched an over eight-and-a-half-year high supported by accelerated increases in new orders and production, even as firms reduced staff numbers. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) increased from 52.0 in August to 56.8 in September -- highest since January 2012. On the global front; Sterling fell against the dollar and the euro on Thursday after a report that Britain and the European Union were still far apart on the key issue of state aid in Brexit trade talks. Finally, the rupee ended at 73.13, 63 paise stronger from its previous close of 73.76 on Wednesday.

The FIIs as per Thursday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 6152.47 crore against gross selling of Rs 6417.75 crore, while in the debt segment, the gross purchase was of Rs 350.14 crore with gross sales of Rs 1524.85 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.87 crore against gross selling of Rs 10.24 crore.

The US markets closed in red on Friday after President Donald Trump said he and his wife had tested positive for the coronavirus, weeks ahead of elections. Asian markets are trading higher on Monday as investors watched for developments on US President Donald Trump's health after he tested positive for the coronavirus last week. Indian markets ended higher with strong gains on Thursday after the Centre announced new guidelines for re-opening of several economic activities and auto sales numbers for September showed significant signs of improvement. Markets remain closed on Friday on account of Mahatma Gandhi Jayanti. Today, the start of session is likely to be positive tracking gains in Asian peers. Investors will be eyeing the Services PMI data to be out later in the day. Market participants will be taking encouragement with Finance Ministry's report that important structural reforms undertaken by the government to combat risks associated with the coronavirus pandemic will strengthen the country's economic fundamentals and ensure long-term sustained growth. Some support will come with report that the CEOs of top 115 companies who met at CII's National Council earlier this week indicated a revival of business sentiment and a gradual rise in expected corporate performance in a poll, raising hopes that a steady recovery of India's economy is on the anvil. Traders may take note of report that Union commerce and industry minister Piyush Goyal has said quality, technology, and scale of production will help India take its annual exports to $1 trillion and not government subsidies. Besides, the 42nd GST Council meeting is all set to discuss a whole host of issues proposing compliance relaxations, finding a solution to the on-going compensation cess issue of states and whether can the rate be reduced for ayurvedic hand sanitizers. The GST Council, which is set to meet on October 05, will take a detailed view on the two options of borrowings given by centre, to states, to make good for lack of funds in the compensation cess kitty. There may be some cautiousness with report that snapping their three-month buying spree, overseas investors turned net sellers in Indian markets in September due to uncertainty ahead of the US presidential polls and surging coronavirus cases. Also, India on Sunday registered 74,767 new Covid-19 cases, taking the tally past the 6.6-million mark. With 902 fatalities in 24 hours, India's death toll stands at 102,714. Auto stocks are likely to trade actively today after majority of them reported strong September sales numbers. Meanwhile, the Rs 600-crore Angel Broking IPO, which was subscribed nearly 4 times on the final day of the bidding process, is set to debut on exchanges today. The price band for the issue was fixed at Rs 305-306 and was sold during September 22-24.

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

Nifty Top volumes

• SBI's board has approved raising of additional tier-I bonds to the extent of Rs 5,000 crore by way of issuance of Basel-III compliant debt instruments in rupees. 
• NTPC has signed Memorandum of Understanding with the Ministry of Power, Government of India. 
• Dr. Reddy's Laboratories has launched Cinacalcet Tablets, a therapeutic equivalent generic version of Sensipar (cinacalcet) Tablets, approved by the USFDA. 
• Bajaj Auto has reported 10 per cent rise in total sales to 441,306 units in September as against 402,035 in the same month last year.