Bombay Stock Exchange (BSE)
The Bombay Stock Exchange (BSE) logo is seen at the BSE building in Mumbai. Bulls seemed to be shying off the markets as a week of losses brought back concerns of a bear market.Reuters

Traders will be keenly watching the benchmarks' close on Friday as the indices closed lower for the seventh successive session on Thursday, raising fears of the onset of bear season. A combination of factors continues to put pressure on the stocks including global worries about escalating US-China trade war rhetoric and domestic election uncertainty.

Bombay Stock Exchange (BSE) benchmark Sensex closed at 37,558 points, shedding 230 points or 0.61 percent and dipping below the 50-day simple moving average (SMA). The 30-share index had hit a low of 37,405 before recovering halfway through the day's decline. National Stock Exchange (NSE) benchmark Nifty crashed below the crucial 11,300-point level to bounce off 11,255 points, before closing at 11,301, down 57 points or 0.51 percent.

Experts' consensus is for investors to avoid using leverage and creating fresh shorts at bounces, as long as Nifty trades below 11,500 levels.

The shrinking premium of Nifty May future, which closed at 11,341, a mere 0.3 percent off the underlying index will not be missed by the traders. The premium was as high as 0.51 percent of the underlying index only a week back. The erosion of the premium is often an indication of the weakening bull sentiment and the next week will be watched cautiously for a turnaround, experts say.

Reliance Industries Limited (RIL) led the decline by sliding 3.56 percent to 1,253, after opening at 1,288. The stock's close just above the intra-day low of 1,251 indicated some more downside and the relative strength index (RSI) does not yet show the end of selling. The sell-off in the share was followed Wednesday's change in Morgan Stanley rating for RIL to equal weight and the accompanying commentary spoke of headwinds going ahead to the company's compounded gross annual revenue (CGAR) because of global disturbances and slimming refining margin.

NIfty teeters on 11,300 level
National Stock Exchange (NSE) Nifty 50 slumped for the seventh successive session on Thursday to a two-month low generating concern that the bears may have returned. The market is expected to remain volatile amid the US-China trade war rhetoric and Lok Sabha election uncertainty.NSE/twitter

The US-China trade war rhetoric is not showing signs of abating with the Chinese team expected to arrive in Washington on Thursday night. Though China has sought to underplay a tweeted threat of US President Donald Trump to increase to 25 percent from 10 percent the tariff on imports from China from Friday, the progress of the talks will be keenly watched. Global indices have continued to recede and Thursday was another day of a bloodbath with all Asian and European indices in the red at the time of publishing. South Korean KOSPI led with a 3.43 percent decline followed by Hong Kong Hang Seng at 2.39 percent and Shanghai Composite 1.48 percent.

Indian currency declined further against the dollar (USDINR) falling below the Rs 70 mark as oil prices continued to decline. Sectors like energy, telecom, power, metals, and oil & gas witnessed sustained selling while IT, consumer durables and auto shares saw buying.

The rising possibility of the return of Prime Minister Narendra Modi at the helm of a coalition led by the Bharatiya Janata Party (BJP) after the Lok Sabha elections has also made the markets cautious. Traders are traditionally wary of coalitions and the administrative bottlenecks that they could create.