Indian equity benchmarks gave up most of the day's gains to end mildly higher on Thursday, as global equities took a breather after recent gains ahead of the US central bank chief's speech. It was the fifth straight session of gains for the key indices. Markets showcased a strong opening, as traders took some encouragement with Commerce Secretary Anup Wadhawan's statement that the department of commerce is proactively engaging with state governments to promote exports. He also requested state governments to extend their support to take forward the initiatives to boost country's outbound shipments. Traders also took note of report that the Reserve Bank of India (RBI) will rationalise regulations for overseas direct investment (ODI) in order to make them simpler and more principles-based. The headline indices held onto gains in afternoon session, taking support from Governor Shaktikanta Das' statement that while the Reserve Bank of India's moratorium on repaying loans was a temporary solution in the context of COVID-19 lockdown, the resolution framework is expected to give a durable relief to borrowers facing the pandemic-related stress. However, Indian shares eked out most of day's gain in late hour of trading session, as traders got anxious with SBI Research report that disposable income growth of households fell to 0.8 times in fiscal 2019-20 as compared to an average growth of 2.3 times in the preceding six fiscals. Some pessimism also came with former Finance Secretary S C Garg stating that the RBI transferred only 44 percent of its surplus or income to the government, which is the lowest in percentage terms in the last seven years. Earlier, the RBI board approved a surplus transfer of Rs 57,128 crore to the central government for Accounting Year 2019-20 (July-June). Finally, the BSE Sensex rose 39.55 points or 0.10% to 39,113.47, while the CNX Nifty was up by 9.65 points or 0.08% to 11,559.25.

The US markets ended mostly higher on Thursday, with the S&P 500 index notching another record finish, after Federal Reserve Chair Jerome Powell announced a widely expected shift with regard to the price-stability side of the central bank's dual mandate. Powell said that the Fed will change its approach to a flexible form of average inflation targeting. The Fed chief stressed that the longer-run goal continues to be an inflation rate of 2 percent but noted inflation will average less than that if it runs below 2 percent following economic downturns and never moves above that level even when the economy is strong. Powell said households and businesses will come to expect this result, meaning that inflation expectations would tend to move below our inflation goal and pull realized inflation down. On the economic data front, economic activity in the US contracted slightly less than initially estimated in the second quarter, according to a report released by the Commerce Department, although the report still showed a sharp drop in gross domestic product. The report said real gross domestic product plummeted by 31.7 percent in the second quarter compared to the previously reported 32.9 percent nosedive. Street had expected the plunge in GDP to be revised to 32.5 percent. Meanwhile, the Labor Department released a report showing initial jobless claims pulled back in the week ended August 22nd. The report said initial jobless claims dropped to 1.006 million, a decrease of 98,000 from the previous week's revised level of 1.104 million. Street had expected jobless claims to decline to 1.000 million from the 1.106 million originally reported for the previous week.

Crude oil futures ended lower on Thursday as traders bet on a quick recovery for the energy market in the Gulf of Mexico region after one of strongest hurricanes in years made landfall near the heart of the US refining industry. Meanwhile, the Interior Department's Bureau of Safety and Environmental Enforcement on Thursday estimated that 84.3% of current oil production in the Gulf of Mexico was shut in, unchanged from a day earlier. It also said 60.1% natural-gas production was shut in Thursday, down from 60.9% a day earlier. Crude oil futures for October declined 35 cents or 0.8 percent to settle at $43.04 a barrel on the New York Mercantile Exchange. October Brent crude dropped 55 cents or 1.2 percent to settle at $45.09 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly higher against dollar on Thursday, on persistent selling of the American currency by exporters. This is the second consecutive session when the rupee was traded higher against dollar. Traders remained optimistic after RBI Governor Shaktikanta Das said the central bank has not exhausted its ammunition to deal with the current situation due to the coronavirus pandemic. Some support also came with Commerce Secretary Anup Wadhawan's statement that the department of commerce is proactively engaging with state governments to promote exports. He also requested state governments to extend their support to take forward the initiatives to boost country's outbound shipments. On the global front; dollar was slightly higher, as investors focused on the US Federal Reserve Chair's speech at the virtual Jackson Hole conference later in the session. Finally, the rupee ended at 73.82, 48 paise stronger from its previous close of 74.30 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity segment and debt segment both. In equity segment, the gross buying was of Rs 6834.58 crore against gross selling of Rs 5180.49 crore. In the debt segment, the gross purchase was of Rs 1937.12 crore with gross sales of Rs 1520.46 crore. In the hybrid segment, the gross buying was of Rs 38.81 crore against gross selling of Rs 6.91 crore.

The US markets ended a choppy session mostly higher on Thursday after Federal Reserve Chairman Jerome Powell said policy makers would no longer pre-emptively hike interest rates to stave off inflation. Asian markets are trading mostly higher in early deals on Friday following positive cues from US markets. Indian equity benchmarks failed to hold gains on Thursday and finally ended the trading session marginally higher. Today, markets are likely to open in green amid positive trend from Asian peers. Support may come as RBI Governor Shaktikanta Das appreciated the government's response to the COVID-19 crisis as being fiscally very prudent and very calibrated.  He said I cannot speak for the government. But I just want to say that in the central bank, as observers of what is happening in the country in the fiscal policy, I think the government's response has been very prudent and very calibrated. Meanwhile, Principal Scientific Adviser K Vijay Raghavan said for achieving Aatmanirbharata (self-reliance) in the area of defence, it is necessary to achieve self-sufficiency in other areas, and also map core capabilities and efficiencies in the country. However, Finance Minister Nirmala Sitharaman after the 41st meeting of the GST Council said the economy is facing an extraordinary Act of God situation, which may result in economic contraction. The Centre placed before the GST Council two options for borrowing by states to meet the shortfall in GST revenues, pegged at Rs 2.35 lakh crore in the current fiscal. As per the Centre's calculation, the compensation requirement by the states in the current fiscal would be Rs 3 lakh crore, of which Rs 65,000 crore is expected to be met from the cess levied in the GST regime. Hence, the total shortfall is estimated at Rs 2.35 lakh crore. Traders may take note of report that the Centre for Monitoring Indian Economy said Younger workforce in the age group of 25-29 years has seen the highest number of job losses during the pandemic while fresh recruitments in this category is low, indicating lower demand for new labour and inability of the enterprises to hire and train fresh recruits during this time. There will be some buzz in oil stocks on private report said that India's oil-product demand is set to slump to a five-year low this financial year, with a bleak outlook for diesel consumption as the nation's truck operators idle vehicles and consider cutting the size of their fleets. There will be some reaction in agriculture sector related stocks with private report stating that the indispensability of the agriculture sector in the country has been brought to focus by the Covid-19 pandemic and it remained the silver lining for 2020-21.

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

Nifty Top volumes

• JSW Steel is expecting larger play in the Specialty Coil coating business. Color coated coils with properties like antimicrobial & anti-dust has opened new opportunities for product segment.
•  Coal India has awarded a Rs 2,900 crore contract to Belarus-based mining equipment manufacturer Belaz for supply of 96 dumpers of 240-tonnes capacity.
•  Infosys has entered into partnership with Genesys. The alliance will position both organizations to enhance and expand their customer experience and contact center offerings.
•  Mahindra & Mahindra has signed a memorandum of understanding with REE Automotive to explore development and manufacturing of electric commercial vehicles for global markets.