Indian equity benchmarks ended lower on Tuesday amid a downbeat global sentiment and widespread selling. The markets opened slightly down and extended the losses as the day progressed as traders were concerned with a finance ministry report stating that 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. Some concern also came with FIEO report stating that India's labour-intensive export sectors such as apparels, marine products, plastics, and gems and jewellery are showing a troubling pattern as the country is experiencing a decline in global market share across these segments during the last five years. Sentiments remained down-beat as a private survey showed India's factory activity expanded at the slowest pace in five months in September but remained solid, with strong demand driving business confidence to its highest level this year, despite increased inflationary pressures. The Manufacturing Purchasing Managers' Index, compiled by S&P Global, fell to 57.5 last month from 58.6 in August. Markets continued to trade under selling pressure in late afternoon session amid reports that FPIs have turned net sellers and pulled out of over Rs 14,767 crore from Indian equities in September, primarily due to dollar appreciation, steady rise in the US bond yields, and a spike in crude oil prices. Traders overlooked Chief Economic Advisor (CEA) V Anantha Nageswaran's statement that the country's economy is poised to grow at an average of 6.5 per cent annually between 2023 and 2030. He said the global economy is going to witness a period of uncertainty, and India has to plug into the global supply chain and make itself attractive for the China-plus one strategy. Traders also paid no heed towards data showing that output of eight core industries rose to a 14-month high of 12.1 percent in August 2023 as against 4.2 percent a year ago, mainly due to expansion in production of coal, crude oil, and natural gas. Core sector growth in July 2023 was 8.4 percent. Meanwhile, the data released by the Controller General of Accounts (CGA) showed the Centre's fiscal deficit in the first five months of 2023-24 touched 36 per cent of the full-year target. In absolute terms, the fiscal deficit -- the gap between expenditure and revenue -- was Rs 6.42 lakh crore as of August-end. Finally, the BSE Sensex fell 316.31 points or 0.48% to 65,512.10 and the CNX Nifty was down by 109.55 points or 0.56% to 19,528.75.

The US markets ended deeply in red on Tuesday with Nasdaq settling cut of over 1.80%, as US Treasury yields surged to their highest levels in over a decade, worrying investors that higher borrowing rates could further stall the housing market. The yield on the 10-year Treasury note on Tuesday was at 4.802%, its highest level since August 2007. The 30-year was at 4.936%, its highest level since September 2007. Meanwhile, weaknesses also prevailed in the markets following the release of a report from the Labor Department unexpectedly showing a notable increase in U.S. job openings in the month of August. The Labor Department said job openings surged to 9.61 million in August from an upwardly revised 8.92 million in July. The jump surprised participants, who had expected job openings to edge down to 8.80 million from the 8.83 million originally reported for the previous month. The data added to interest rate concerns amid worries strength in the labor market could convince the Federal Reserve to raise rates higher than had been anticipated and keep rates an elevated level for longer than expected. On the sectoral front, Airline stocks saw substantial weakness on the day, resulting in a 2.8 percent nosedive by the NYSE Arca Airline Index. The index plummeted to its lowest closing level in nine months. Significant weakness was also visible among software stocks, as reflected by the 2.6 percent plunge by the Dow Jones U.S. Software Index. Interest rate concerns also weighed on housing stocks, dragging the Philadelphia Housing Sector Index down by 2.5 percent to a nearly four-month closing low.

Crude oil futures ended higher on Tuesday on hopes the Organization of the Petroleum Exporting Countries (OPEC) and allies, jointly known as OPEC+ will not change their policy at the committee's meeting on Wednesday. Further, comments from senior Federal Reserve policy maker Raphael Bostic that the central bank was in no rush to pile rate hikes to get inflation back under control, and that there might even be a rate cut by the end of next year, supported oil prices. However, oil prices drifted lower earlier in the day on global economic fears, the dollar's surge and rising bond yields. Benchmark crude oil futures for November delivery rose $0.41 or about 0.5 percent to settle at $89.23 a barrel on the New York Mercantile Exchange. Brent crude for December delivery gained $0.21 or about 0.2 percent to settle at $90.92 a barrel on London's Intercontinental Exchange.

Indian rupee weakened considerably against dollar on Tuesday as a strong US dollar and weak domestic equities dented investor sentiments. Muted domestic macroeconomic data and sustained FII outflows also mounted downside pressure on rupee. Traders were concerned as India's manufacturing sector growth eased in the month of September. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) eased to 57.5 in September 2023 from 58.6 in August 2023. On the global front, the dollar reached fresh highs on Tuesday, pushing the yen down closer to a potential intervention zone, after strong U.S. economic data bolstered the view that the Federal Reserve will keep interest rates higher for longer. Finally, the rupee ended at 83.20 (Provisional), weaker by 14 paise from its previous close of 83.06 on Friday.

The FIIs as per Tuesday's data were net sellers in equity segment, while they were buyers in debt segment. In equity segment, the gross buying was of Rs 24634.94 crore against gross selling of Rs 27502.70 crore, while in the debt segment, the gross purchase was of Rs 2160.56 crore with gross sales of Rs 1301.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.46 crore against gross selling of Rs 26.35 crore.

The US markets ended lower on Tuesday after job openings data indicated the labor market is still strong and bond yields marched higher. Asian markets are trading in red on Wednesday following the broadly negative cues from global markets overnight. Indian markets stayed under pressure and settled in red zone on Tuesday amid a downbeat global sentiment. Today, markets are likely to get yet another negative start following overnight losses on Wall Street as well as weakness in Asian counterparts amid soaring US Treasuries. Persistent foreign fund outflows likely to hurt domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) offloaded shares worth Rs 2,034.14 crore on October 3. Traders will be concerned as the World Bank increased its retail inflation forecast for India for 2023-24 to 5.9 per cent from the 5.2 per cent estimate made in April. Its economic growth forecast for the country remains at 6.3 per cent, underpinned by strong investment growth. It said abnormal rainfall during the monsoon months caused a sharp increase in food prices in July 2023. Though eased in August, it is expected to continue to weigh on headline inflation through the rest of the fiscal year. Meanwhile, market regulator Sebi has announced the introduction of a centralized system for reporting and verifying the death of an investor. This is aimed at streamlining the process of transferring assets in the securities market. Railways stocks will be focus as data released by the ministry of railways showed that after months of sluggish growth, movement of goods through Indian Railways recorded a growth of 6.67 per cent in September, with 123.53 million tonnes (mt) of volumes achieved. There will be some reaction in edible oil industry stocks with a private report that the government is aiming to increase domestic palm oil production from current level of 0.35 million tonne (MT) to a MT by 2030 under the national oil palm mission through adding at least 0.1 million hectare (MH) of new plantation annually in the five to six years. Moreover, shares of Updater Services to list today.

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

Nifty Top volumes

• Tata Steel is aiming to complete decarbonisation journey at its plant in the UK in next three years. 
• L&T's construction arm -- L&T construction has secured new order for its Transportation Infrastructure business vertical for the prestigious Dahisar Bhayander Bridge project in Mumbai. 
• UltraTech Cement's wholly-owned subsidiary in UAE viz. Star Cement Co LLC (Star Cement) has entered into a cooperation agreement with Cemex UAE.
• Coal India has reported 12.6 per cent year-on-year rise in coal production to 51.4 million tonnes during September.