Indian equity benchmarks ended higher on Friday on the back of value-buying in Metal, Healthcare and PSU stocks aided by positive trends in the US and European markets. The markets started the day on a positive note and extended gains as the day progressed as the figures released by the Reserve Bank of India showed that India's foreign exchange reserves in nominal terms (which includes valuation effects) rose by $16.6 billion during April-June 2023, mainly driven by strong Foreign Institutional Investment (FII) flows. Traders took support with CBIC chief Sanjay Kumar Agarwal's statement that increased monthly GST collections are mainly on account of higher compliance, and the GST Council's decision to tighten return filing and registration process would help reduce fake ITC claims in evasion prone sectors, including iron and steel. But profit booking in the final hour pared some of the gains.  Some cautiousness came as rating agency CRISIL said after clocking a robust 15.9 per cent growth in FY23, the bank credit growth in India is likely to moderate to 13-13.5 per cent in the current financial year (FY24). It will improve to 13.5-14 per cent in the next financial year (FY25) as economic growth picks up. Some concerns came as the provisional data from the National Stock Exchange (NSE) showed foreign institutional investors (FII) sold shares worth Rs 3,364.22 crore on September 28. However, key gauges managed to end with decent gains as some optimism remained among traders with credit rating agency, India Ratings and Research (Ind-Ra) in its September 2023 edition of its Credit Market Tracker report stating that the tightness in the liquidity market is likely to ease meaningfully in the coming quarter, as the government spending has increased, followed by a further release of money from the incremental cash reserve ratio funds. Finally, the BSE Sensex rose 320.09 points or 0.49% to 65,828.41 and the CNX Nifty was up by 114.75 points or 0.59% to 19,638.30.

The US markets ended mostly higher on Monday with Nasdaq settling over half percent. However, concerns about the outlook for interest rates continued to hang over the markets ahead of the release of the Labor Department's closely watched monthly jobs report on Friday. Street currently expects employment to increase by 163,000 jobs in September after climbing by 187,000 jobs in August, while the unemployment rate is expected to edge down to 3.7 percent from 3.8 percent. Further, negative sentiment was also generated in reaction to a surge by treasury yields, with the yield on the benchmark ten-year note jumping to its highest level in almost sixteen years. The spike by yields came after U.S. lawmakers passed a last minute, temporary spending bill over the weekend to keep the U.S. government open. On the sectoral front, the Institute for Supply Management released a report showing a modest slowdown in the pace of contraction in U.S. manufacturing activity in the month of September. The ISM said its manufacturing PMI rose to 49.0 in September from 47.6 in August, although a reading below 50 still indicates a contraction. Street had expected the index to inch up to 47.7. A separate report released by the Commerce Department showed construction spending in the U.S. increased in line with street estimates in the month of August. The Commerce Department said construction spending climbed 0.5 percent to an annual rate of $1.984 trillion in August after jumping by an upwardly revised 0.9 percent to a rate of $1,847.3 billion in July.

Crude oil futures ended deeply in red on Monday on concerns about prospects of rising supplies in the market as well as outlook for energy demand due to the impact of higher interest rates on economic growth. Crude oil prices also fell on account of rising dollar. Meanwhile, the focus is now on the meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies on Wednesday (October 4). Benchmark crude oil futures for November delivery dropped $1.97 or about 2.2 percent to settle at $88.82 a barrel on the New York Mercantile Exchange. Brent crude for December delivery fell $1.49 or about 1.6 percent to settle at $90.71 a barrel on London's Intercontinental Exchange.

Indian rupee closed stronger against the US dollar on Friday supported by a sharp correction in the greenback against major rivals overseas and steady crude oil prices. A positive trend in equity markets also aided the domestic unit. Some support came in with the figures released by the Reserve Bank of India showing that India's foreign exchange reserves in nominal terms (which includes valuation effects) rose by $16.6 billion during April-June 2023, mainly driven by strong Foreign Institutional Investment (FII) flows. On the global front, the Pound Sterling (GBP) discovers stellar buying interest as investors digest upside risks to a recession in the United Kingdom. Finally, the rupee ended at 83.04 (Provisional), stronger by 15 paise from its previous close of 83.19 on Thursday.

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 9974.62 crore against gross selling of Rs 12163.94 crore, while in the debt segment, the gross purchase was of Rs 945.39 crore with gross sales of Rs 1180.25 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.18 crore against gross selling of Rs 9.54 crore.

The US markets ended mostly higher on Monday as rising oil prices and bond yields offset signs of resilience in the U.S. manufacturing sector and investor optimism over lawmakers reaching a deal to avert government shutdown. Asian markets are trading mostly in red on Tuesday after the World Bank said that east Asia's developing economies are likely to expand at one of the lowest rates in five decades. Indian markets ended with solid gains on Friday, tracking positive cues from global markets amid positive Eurozone inflation and U.K. GDP data. Markets were closed on Monday on account of Gandhi Jayanti. Today, indices are likely to start a crucial week on negative note ahead of the RBI's monetary policy outcome later in the week. The RBI Governor-headed six-member Monetary Policy Committee (MPC) is scheduled to meet for three days beginning October 4. Governor Skhatikanta Das will announce the decision on October 6. There are expectations that the Central Bank will leave interest rate unchanged. Also, investors will be eyeing S&P Global Manufacturing PMI data to be out later in the day for more cues. Traders will be concerned as a finance ministry report said the government's total gross debt increased by 2.2 per cent quarter-on-quarter to Rs 159.53 lakh crore in April-June this fiscal. The liabilities stood at Rs 156.08 lakh crore at March-end. Some cautiousness may come as the Reserve Bank said the country's foreign exchange reserves declined further by $2.335 billion to $590.702 billion for the week ended September 22. In the previous reporting week, the overall reserves dropped by $867 million to $593.037 billion. Meanwhile, data released by the Controller General of Accounts showed that the government's fiscal deficit widened to Rs 6.43 lakh crore in April-August from Rs 6.06 lakh crore in April-July period.  However, some respite may come as the government data showed that the growth of eight key infrastructure sectors rose to a 14-month high of 12.1 per cent in August 2023 against 4.2 per cent a year ago, mainly due to expansion in production of coal, crude oil, and natural gas. Some optimism may come as gross GST collection rose 10% to over Rs 1.62 lakh crore in September, crossing the Rs 1.6 lakh crore mark for the fourth time during current financial year. Some support may come as the India Meteorological Department (IMD) said the four-month monsoon season has ended with India receiving normal rainfall - 820 mm against a long-period average of 868.6 mm - with positive factors countering the effect of El Nino conditions. Besides, Chief Economic Advisor V Anantha Nageswaran said the Indian economy is poised to grow at an average of 6.5% annually between 2023 and 2030. Traders may take note of a report that retail inflation for industrial workers eased to 6.91 per cent in August from 7.54 per cent in July this year mainly due to lower prices of certain food items. There will be some reaction in online gaming industry related stocks as the Centre notified the amendments in Central Goods and Services Tax (CGST) and Integrated Goods and Services Tax (IGST) for the online gaming companies as passed by the Lok Sabha on August 11 and in line with the recommendations of the GST Council. The amendments will come into effect from October 1. Garment industry stocks will be in limelight as report by Crisil Ratings said readymade garment manufacturers are likely to post an 8-10 per cent increase in revenue on the back of growing domestic demand and revival of exports. Auto will be buzzing reacting to their monthly sales numbers. Meanwhile, JSW Infrastructure is likely to debut on the bourses on October 3.

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

Nifty Top volumes

• Tata Steel has signed an agreement with Indian Oil Corporation and its business associate to further reduce carbon footprint at its Ferro Alloys plant. 
• State Bank of India has sold 95,00,000 (2.47%) stake in MSP Steel & Power through an open market deal. 
• Larsen & Toubro's construction arm -- L&T construction has secured new order for its Heavy Civil Infrastructure business from prestigious client MMRDA.
• Dr. Reddy's Laboratories' wholly-owned subsidiary -- Dr. Reddy's Laboratories SA, in Switzerland, has incorporated a WOS in Jamaica, named Dr. Reddy's Laboratories Jamaica.