Indian equity benchmarks, Sensex and Nifty, began Friday with a significant drop, mirroring negative trends from Wall Street and Asian markets. Concerns over global economic growth heightened after disappointing economic data from the U.S., Europe, and China, overshadowing optimism for a near-term interest rate cut by the US Federal Reserve. In early trading, Sensex and Nifty fell around 1% each, with significant selling pressure in metal stocks. 

The cautious sentiment was further fueled by the India Meteorological Department's (IMD) forecast of above-normal rainfall for the remaining monsoon months of August and September. This could potentially damage standing kharif crops, depending on their maturity stage.

Investors largely overlooked positive domestic data showing GST collections in July rose by 10.3% to over ₹1.82 trillion, the third-highest monthly collection since the GST regime began in 2017. Total refunds in July were ₹16,283 crore. 

Banking sector stocks gained attention as Moody's noted the Reserve Bank of India's new draft guidelines on liquidity management as credit positive. Zomato shares surged after reporting a significant jump in Q1FY25 net profit to ₹253 crore, compared to ₹2 crore in Q1FY24.

The BSE Sensex was trading at 81,204.25, down 663.30 points or 0.81%, with 6 stocks advancing and 24 declining. The BSE Mid cap index dropped 1.12%, while the Small cap index fell 0.84%. FMCG was the only sectoral index in the green, up 0.34%, whereas Metal, Auto, PSU, Oil & Gas, and Capital Goods sectors were the top losers.

On the Sensex, HDFC Bank, Hindustan Unilever, Asian Paints, Nestle, and ITC were the top gainers. Tata Motors, Tata Steel, Maruti Suzuki, JSW Steel, and Larsen & Toubro were the top losers.

IMD has predicted that India will likely receive above-normal rainfall in August and September, with La Nina conditions expected by late August. This could lead to landslides and floods, impacting agriculture, as 52% of India's cultivated area depends on the monsoon. So far, India has recorded 453.8 mm of rainfall, 2% above the normal 445.8 mm since June 1.

The CNX Nifty was trading at 24,742.35, down 268.55 points or 1.07%, with 4 stocks advancing and 46 declining. The top gainers on Nifty were HDFC Bank, Hindustan Unilever, Apollo Hospital, and Dr. Reddy's Lab, while Maruti Suzuki, ONGC, Tata Motors, Tata Steel, and Hindalco were the top losers.

Asian markets were also trading lower, with major indices like Nikkei 225, Taiwan Weighted, Hang Seng, KOSPI, Straits Times, Shanghai Composite, and Jakarta Composite all posting declines.