Snapping two-day losing run, Indian equity benchmarks rebounded sharply to touch near intraday day's high point on Thursday, supported by healthy buying in Reliance Industries, Asian Paints and Axis Bank. Key indices opened on a strong note and sustained buying momentum throughout the session, as traders took encouragement with Finance Minister Nirmala Sitharaman's statement that banks are going to be the catalysts for economic revival. Some support also came in with report that the government is planning to save about Rs 35,000 crore to help manage the fiscal load put by the production-linked incentive (PLI) and phased manufacturing program (PMP) schemes, its initiatives to attract investment into the country. Traders took note of report that Niti Aayog CEO Amitabh Kant said India was the youngest country with a vibrant startup eco-system and it must convert the present (COVID-19) crisis into an opportunity. Domestic indices gained more strength during final hour of session, taking support form report that India's exports during the first week of September jumped 13.35 per cent year-on-year to 6.12 billion dollars. At the same time, imports declined by 21.37 per cent to 6.85 billion dollars. Consequently, the deficit during September 1 to 7 worked out to 730 million dollars. Traders paid no heed towards ICRA's report that not paying the full Goods and Services Tax (GST) compensations by the Centre is among the factors which may result in up to Rs 3 lakh crore cut in capital expenditure (capex) by the states in FY21. It noted that the borrowing alternative offered by the Centre to make up for the shortfall in the promised compensation will lead to the states' fiscal deficits widening to 4.25-5.52 percent. Finally, the BSE Sensex rose 646.40 points or 1.69% to 38,840.32, while the CNX Nifty was up by 171.25 points or 1.52% to 11,449.25.

The US markets ended lower on Thursday after a volatile session, as investors hope for a further recovery towards last week record highs was undermined by weak labor market data and a lack of progress on another fiscal stimulus bill in Washington, while valuations of technology stocks are still seen too high as the economy struggles to recover from the COVID-19 pandemic. Democrats blocked a Senate Republican bill on the Senate floor Thursday, raising the possibility that a stimulus bill would have to wait until after the November Presidential election. On the economic data front, the Labor Department released a report showing first-time claims for US unemployment benefits unexpectedly came in unchanged in the week ended September 5th. The Labor Department said initial jobless claims came in at 884,000, unchanged from the previous week's revised level. Street had expected jobless claims to drop to 846,000 from the 881,000 originally reported for the previous week. The report also showed an increase in continuing claims, a reading on the number of people receiving ongoing unemployment assistance. A separate report from the Labor Department showed producer prices in the US increased by slightly more than expected in the month of August.  The Labor Department said its producer price index for final demand rose by 0.3 percent in August after climbing by 0.6 percent in July. Street had expected prices to edge up by 0.2 percent. Excluding food and energy prices, core producer prices increased by 0.4 percent in August following a 0.5 percent advance in July. Core prices were also expected to tick up by 0.2 percent.

Crude oil futures settled lower on Thursday after US government data revealed a weekly climb in US crude inventories. The Energy Information Administration (EIA) reported that US crude inventories rose by 2 million barrels for the week ended September 4 -the first weekly rise in seven weeks. Total US crude inventories, excluding those in the Strategic Petroleum Reserve stood at 500.4 million barrels, about 14% above the five-year average for this time of year. The American Petroleum Institute on Wednesday reported a climb of 3 million barrels. Crude oil futures for October fell 75 cents or 2 percent to settle at $37.30 a barrel on the New York Mercantile Exchange. November Brent crude declined 73 cents or 1.8 percent to settle at $40.06 a barrel on London's Intercontinental Exchange.

Indian rupee ended stronger against dollar on Thursday due to fresh selling of the American currency by banks and exporters. Besides, healthy growth in the domestic equity market also added support to rupee. Market participants took support with Niti Aayog CEO Amitabh Kant stating India is the youngest country in the world with a vibrant startup eco-system and therefore India must convert this (COVID-19) crisis into an opportunity by positioning itself as a great innovator and transformer. He also said the country can successfully find solutions to massive challenges across sectors through the development of digital technology solutions. On the global front; pound calmed down on Thursday after whipsawing the day before as investors tried to understand whether a British bill to overwrite the Brexit divorce deal will cause the European Union to leave the negotiating table. Finally, the rupee ended at 73.46, 9 paise stronger from its previous close of 73.55 on Wednesday.

The FIIs as per Thursday's data were net seller in equity, while they were net buyer in debt segment. In equity segment, the gross buying was of Rs 5091.56 crore against gross selling of Rs 6051.54 crore, while in the debt segment, the gross purchase was of Rs 1215.69 crore with gross sales of Rs 735.25 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.72 crore against gross selling of Rs 17.00 crore.

The US markets closed in red on Thursday as heavyweight tech-related stocks resumed their decline following a sharp rebound the previous session. Asian markets are trading mostly lower on Friday amid growing concerns about another round of negotiations on the UK's departure from the European Union. Indian markets ended notably higher on Thursday, with investors picking up shares from across various sectors, thanks to positive cues from Wall Street. Today, the start of session is likely to be pessimistic amid weakness in global markets. Investors will be eyeing the July industrial and manufacturing production data, which is scheduled to release later in the day. Traders will be concerned with ratings agency Crisil's report that the Indian economy will contract by 9 per cent in 2020-21 as the coronavirus infections are yet to peak and the government is not providing adequate direct fiscal support. Also, a private report stated that India's central bank could succeed in inflation targeting by reaching the 4 per cent target over a particular business cycle rather than for a particular date such as two year ahead. Rising coronavirus cases coupled with India and China tensions may weight on market sentiments. With a highest single-day spike of 96,760 coronavirus cases, India's tally has surged past the 4.5-million mark to 4,559,725. India and China have agreed on a five-point plan for resolving the prolonged border face-off in eastern Ladakh. There will some cautiousness with Care ratings report that reflecting the overall stress in the economy, the employment growth rate declined to 3.5 per cent in FY20 from 3.8 per cent in the previous fiscal year, but the total number of jobs increased to 50.02 lakh from 48.32 lakh, says a report. In FY20, 1.70 lakh new jobs were added, while the net addition was 1.76 lakh in FY19. However, some support may come later in the day with Commerce and Industry Minister Piyush Goyal's statement that government given America a very good, very balanced offer for the agreement and indicated that the India-US limited trade deal is likely to be signed after elections. Traders may take note of the IMF's statement that there is a need for another stimulus, especially expenditures on health, food and income support for vulnerable households, and support for businesses in view of the Covid-19 pandemic. Meanwhile, India has fallen 26 spots to the 105th position on the Global Economic Freedom Index 2020, while the country was at the 79th spot in last year's rankings.

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

Nifty Top volumes

• Reliance Industries is offering to sell a roughly $20 billion stake in its retail business to Amazon.com Inc. 
• The US trade body has granted funding to the IOC carbon capture, utilisation and storage capacity in the Koyali refinery in Gujarat. 
• Eicher Motors' motorcycle arm -- Royal Enfield is going to commence local assembly of motorcycles in Argentina thereby becoming the first such facility to be set up outside Chennai. 
• Nestle India has launched an initiative to support entrepreneurs through its kiosk business model.