Thursday was yet another bad day for Indian equity benchmarks, as both the larger peers, Sensex and Nifty closed with steep losses of over a percent, even though the Reserve Bank of India (RBI) cut repo rate by 25 basis points to lowest in nine years and changed policy stance to Accommodative from Neutral. After a cautious start, markets remained under the grip of bears, amid reports that India's services sector growth eased further in the month of May, as disruptions arising from the elections in the earlier part of the month hampered growth of new work intakes. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 50.2 in May from 51 in April. However, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- was at 51.7 in May, unchanged from April. Key indices extended their losses in the second half of trading session to settle near their intraday low points, as the RBI lowered the economic growth forecast for the current fiscal to 7 per cent due to the slowdown in domestic activities and escalation in a global trade war. In the April monetary policy, the growth of Gross Domestic Product (GDP) for 2019-20 was projected at 7.2 per cent. Trading sentiments also remained lackluster with the India Meteorological Department's (IMD) statement that the onset of monsoon is likely to be delayed by a week and it is now expected to arrive only by June 8. The normal onset date for monsoon over Kerala is June 1 which also marks the official commencement of the four-month-long rainfall season. Finally, the BSE Sensex slipped 553.82 points or 1.38% to 39,529.72, while the CNX Nifty was down by 177.90 points or 1.48% to 11,843.75.

Extending their previous session's gains, the US markets ended higher with gains of over half a percent on Thursday, after reports that Trump administration is considering delaying a planned 5% tariff on all imports from Mexico, as discussions continue over how to stop the flow of Central American migrants to the US border. Mexico is pushing for more time to negotiate amid concerns the two sides will not reach an agreement on all the steps Mexico needs to take to stop the flow of migrants before a Monday deadline. Besides, the Labor Department released a report showing first-time claims for US unemployment benefits came in unchanged in the week ended June 01. The Labor Department said initial jobless claims came in at 218,000, unchanged from the previous week's revised level. Street had expected jobless claims to come in unchanged compared to the 215,000 originally reported for the previous week. However, revised data released by the Labor Department showed US labor productivity increased by slightly less than initially estimated in the first quarter. The report said the jump in productivity in the first quarter was downwardly revised to 3.4 percent from 3.6 percent, although the growth still reflects a notable acceleration from the 1.3 percent increase in the fourth quarter. Productivity is a measure of output per hour, and the spike in output was downwardly revised to 3.9 percent from 4.1 percent, while the increase in hours worked was unrevised at 0.5 percent. Meanwhile, reflecting a bigger decease in the dollar value of imports than the dollar value of exports, the Commerce Department released a report showing the US trade deficit narrowed in the month of April. Dow Jones Industrial Average rose 181.09 points or 0.71 percent to 25720.66, Nasdaq gained 40.08 points or 0.53 percent to 7615.55 and S&P 500 was up by 17.34 points or 0.61 percent to 2843.49.

Crude oil futures settled higher on Thursday as a report that the US is likely to delay tariffs on Mexico helped ease concerns over trade tensions that threaten to hurt energy demand. The move comes a day after US benchmark crude entered a bear market on the back a report showing domestic supplies hit a nearly two-year high. Meanwhile, traders were watching updates on a production-cut agreement between the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers ahead of the deal's expiration at the end of this month. The next OPEC meeting, which had been scheduled for June 25-26, may be postponed to early July at the request of Russia. Benchmark crude oil futures for July gained 91 cents or 1.8 percent to settle at $52.59 a barrel on the New York Mercantile Exchange. August Brent rose $1.04 or 1.7 percent to settle at $61.67 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against US dollar on Thursday, due to fresh demand for the American currency from banks and importers. Traders remained cautious with private report stating that the Indian currency will fall further against the U.S. dollar over the next 12 months than previously thought, hit by slowing growth momentum and an escalating global trade war that has recently threatened to engulf India. Heavy losses in domestic equity markets also weighed on the domestic unit. However, losses were limited as some optimism remained among the traders with World Bank report which forecasted that India's economy is projected to grow at 7.5 per cent in the next three years, supported by robust investment and private consumption, in some good news to the new Indian government. On the global front, U.S. dollar slid lower against the yen on Thursday as safe haven demand continued to be underpinned amid trade tensions, as investors looked ahead to the European Central Bank's latest policy decision later in the day. Finally, the rupee ended at 69.28, 2 paise weaker from its previous close of 69.26 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5110.49 crore against gross selling of Rs 4974.49 crore, while in the debt segment, the gross purchase was of Rs 2530.80 crore with gross sales of Rs 968.63 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.21 crore against gross selling of Rs 0.51 crore.

The US markets ended higher on Thursday as investors speculated that the US and Mexico are getting closer to a resolution over immigration issues that would delay the tariffs threatened by President Donald Trump. Asian markets are trading mostly in green on Friday as investors waited for concrete signs of progress in the US-Mexican trade standoff. Indian markets ended lower on Thursday, with cut of over a per cent, as RBI lowered the economic growth forecast for the current fiscal to 7 per cent from 7.2 per cent forecasted earlier. Today, the markets are likely to make a cautious start despite positive global cues. There will be some cautiousness with the India Meteorological Department's (IMD) statement that the arrival of the monsoon in the national capital is likely to be delayed by two-three days, though the city is expected to receive normal rainfall. It said normally, the monsoon reaches Delhi by June 29. Since there is a delay in its onset in the southern peninsula, the wind system is likely to take two-three days longer to reach northwest India. However, some support may come later in the day with report that a G-20 surveillance note expects India's economy to grow 7.3% in 2019 and 7.5% in 2020. Traders may take note of the Reserve Bank of India (RBI) governor Shaktikanta Das' statement that the RBI expects the government to continue to be broadly prudent on the fiscal side. He said the government has broadly maintained the fiscal deficit glide path and RBI expects it to remain broadly fiscally prudent going forward. There will be some buzz in the banking sector stocks with the RBI governor Shaktikanta Das' statement that the RBI will issue a new set of guidelines for bad loan resolution, replacing the February 12 circular that was quashed by the Supreme Court, within the next three-four days. There will be some reaction in textile industry stocks with report that India, which is emerging as a global textile hub with huge potential, needs to develop man-made fibre to remain competitive in the global market and it aims to be a $350 billion industry by 2025. Also, there will be some buzz in the steel industry stocks with CARE Ratings' report that India's steel consumption is expected to grow by 5%-6% this year, on the back of government's expenditure towards infrastructure and construction. It added that with NDA being voted back to power, the focus will continue to remain on infrastructure development.

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

Nifty Top volumes

• Wipro has signed a definitive agreement to acquire International TechneGroup Incorporated. 
• Bharti Airtel's subsidiary -- Airtel Payments Bank has enabled open loop BHIM UPI based payments at over 500,000 merchant points across India. 
• Infosys has collaborated with Microsoft to deliver SB&S solutions for the architecture, engineering, construction, facilities management and real estate development markets. 
• JSW Steel is planning to scale up the capacity of its flagship integrated steel plant at Vijayanagar in Karnataka to 18 MTPA after 2020.