Indian equity benchmarks extended gains to a seventh straight session on Friday, led by buying in Banking, Finance, Capital Goods and Oil & Gas stocks. After making optimistic start, domestic indices lost their ground and traded with minor losses, as traders turned anxious with former Reserve Bank Governor C Rangarajan's statement that the combined fiscal deficit of states and the centre is likely to go up to 14 per cent during the current year (FY21) against the mandated level of 6 per cent. He also said banks should neither be timid nor adventurous while lending as the loans of today should not become NPAs of tomorrow. However, markets soon bounced back into positive territory in morning deals, as market participants cheered the RBI's monetary policy. The RBI decided to keep the benchmark interest rate unchanged at 4 percent but maintained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis. Local indices gained more strength in afternoon deals, with Assocham's statement that India's economy has shown a remarkable resilience in the last few months, braving the impact of the coronavirus pandemic with lead indicators such as manufacturing PMI and exports returning to growth trajectory. Some support also came with the Finance Ministry's statement that banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector impacted by slowdown caused by the coronavirus pandemic. Besides, RBI Governor Shaktikanta Das' comments on expectation of GDP turning positive in the January-March quarter of the current financial year fuelled the market rally. Finally, the BSE Sensex rose 326.82 points or 0.81% to 40,509.49, while the CNX Nifty was up by 79.60 points or 0.67% to 11,914.20.

The US markets extended their gains for third straight session and ended higher with notable gains on Friday amid continued optimism about a new stimulus bill. Also, traders kept a close eye on the latest developments in Washington. President Donald Trump suggested he was once again in favor of a broad relief package. Trump's comments came amid reports that the White House was planning to offer a $1.8 trillion package, which is up from the administration's previous $1.6 trillion proposal but still below the $2.2 trillion bill passed by House Democrats. House Speaker Nancy Pelosi's deputy chief of staff Drew Hammill later said Treasury Secretary Steven Mnuchin had returned to the table with a proposal that attempted to address some of the concerns Democrats have. Meanwhile, amid the back-and-forth between the White House and Pelosi, Senate Majority Leader Mitch McConnell said a new relief bill is unlikely to pass before the elections. Besides, the rally by gold stocks came amid a substantial increase by the price of the precious metal, with gold for December delivery soaring $31.10 to $1,926.20 an ounce. Significant strength was also visible among software stocks, as reflected by the 2.3 percent jump the Dow Jones US Software Index. The index ended the session at its best closing level in over a month. Retail, airline and networking stocks also moved notably higher, while energy stocks bucked the uptrend amid a pullback by the price of crude oil.

Crude oil futures settled lower on Friday as traders turned cautious weighing demand and supply positions in the market. According to reports, Norway reached an agreement with labor union officials, bringing the strike to an end, which otherwise could have resulted in a sharp reduction in Norwegian crude output next week. According to a report from Baker Hughes, the number of active oil drilling rigs count in the US went up by 4 to 193 this week. Traders were also reacting to comments by the Organization of the Petroleum Exporting Countries (OPEC) that world oil demand will plateau in the late 2030s and could by then have begun to decline. Crude oil futures for November declined $0.59 or 1.4 percent to settle at $40.60 a barrel on the New York Mercantile Exchange. December Brent crude fell $0.50 or 1.1 percent to settle at $42.85 a barrel on London's Intercontinental Exchange.

Indian Rupee ended stronger against dollar on Friday due to fresh selling of the American currency by banks and exporters. Sentiments remained upbeat with Assocham report that India's economy has shown a remarkable resilience in the last few months, braving the impact of the coronavirus pandemic with lead indicators such as manufacturing PMI and exports returning to growth trajectory. Besides, healthy gains in the domestic equity markets added to the rupee gains. Meanwhile, Reserve Bank of India (RBI) left key interest rates unchanged but signalled more easing ahead to support an economy that it sees contracting 9.5 per cent in the current fiscal. On the global front, dollar edged lower on Friday and was headed for a second consecutive week of losses as investors increased bets Joe Biden would win the U.S. presidency and offer fiscal stimulus after the elections. Finally, the rupee ended at 73.16, 8 paise stronger from its previous close of 73.24 on Thursday.

The FIIs as per Friday's data were net buyers in equity, while net sellers in debt segment. In equity segment, the gross buying was of Rs 6775.91 crore against gross selling of Rs 5550.09 crore, while in the debt segment, the gross purchase was of Rs 114.19 crore with gross sales of Rs 372.23 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.58 crore against gross selling of Rs 14.79 crore.

The US markets ended higher on Friday after President Donald Trump suggested he was once again in favor of a broad relief package. Asian markets are trading mostly in green on Monday on renewed hopes for US stimulus. Indian markets ended higher on Friday led by gains in financials after the Reserve Bank of India (RBI) kept interest rates unchanged at 4 percent in the face of high inflation, while also retaining its accommodative stance. Today, the start of new week is likely to be optimistic, extending their rally, on the back of firm global cues.  Investors will be eyeing the industrial production data for August and CPI inflation for September to be released later in the day. Some support will come in with report that foreign portfolio investors (FPI) have invested Rs 1,086 crore on a net basis so far in October in Indian markets, tracking encouraging factors including improved GST collection, acceleration in economic activity and positive global cues. Traders may take note of report that India will press for early and complete disengagement of troops by China from all the friction points in eastern Ladakh at the seventh round of high-level military talks between the two countries to be held today. Meanwhile, the GST Council in its meeting on October 12 is likely to discuss the suggestion of non-BJP ruled states of setting up a ministerial panel to develop consensus on the issue of compensation. Moreover, India on Sunday registered 67,757 new Covid-19 cases, taking the tally to 7,119,300 and the death toll reached 109,184. There will be some buzz in the agriculture stocks as agriculture-commodities exports rose by 43.4 per cent to Rs 53,626.6 crore in the first half of the current fiscal notwithstanding the ongoing COVID-19 crisis. There will be some reaction in power stocks with report that power producers' total dues owed by distribution firms rose over 37 per cent year-on-year to Rs 1.33 lakh crore in August 2020, reflecting stress in the sector.  Financials could be in focus ahead of the Supreme Court hearing on loan moratorium issue. The Reserve Bank of India has filed an affidavit before the apex court saying that a loan moratorium exceeding six months could impact credit behavior of borrowers and increase the risks of delinquencies post resumption of scheduled payments. There will be some important earnings announcements, like Wipro, to keep the markets buzzing. Besides, Mazagon Dock and UTI Asset Management Company's shares will today make their stock market debut, after a stellar performance during the subscription phase of the IPO.

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

Nifty Top volumes

• TCS has launched 10 new Threat Management Centers across the globe that will focus on providing cyber security services to its enterprise customers. 
• HDFC Bank has taken its festive offers to the most remote parts of the country. 
• Hero MotoCorp has introduced a 24x7 Roadside Assistance program for its valued-customers. 
• Tata Steel's consolidated steel production fell by 3.45 per cent to 7.26 MT in the second quarter of the current fiscal.