Indian equity benchmarks staged splendid performance on Tuesday with frontline gauges surpassing their crucial 58,000 (Sensex) and 17,250 (Nifty) levels on sustained buying by fund and retail investors. Key gauges made gap-up opening and showed strength throughout the day amid positive trends in global equity markets. Traders took encouragement with Crisil Ratings said that India Inc's credit quality showed further improvement in April-September period with the ratio of upgrades to downgrades inching higher. Crisil Ratings, which rates 6,800 companies, added that the credit ratio's improvement to 5.52 times in H1FY23 as compared to 5.04 times in H2FY22 was driven by leaner balance sheets led by healthy cash flows and muted investments.  Some solace also came with Icra Ratings' statement that credit quality of corporates has strengthened further in the first half of the current fiscal with rating upgrades being more than three times that of downgrades, carrying on with the momentum since early FY22. Domestic sentiments remained up-beat in late afternoon deals, as foreign investors turned net buyers after a gap of eight days of being net sellers. The foreign portfolio investors bought equities worth 590.58, according to National Stock Exchange data. Market participants paid no heed towards the United Nations Conference on Trade and Development's (UNCTAD) statement that India's economic growth is expected to decline to 5.7 per cent this year from 8.2 per cent in 2021, citing higher financing cost and weaker public expenditures. Traders also overlooked the commerce ministry in its preliminary data has showed that India's merchandise exports contracted by 3.52 per cent to $32.62 billion in September 2022 as against $33.81 billion in the same month last year, while the trade deficit widened to $26.72 billion. Finally, the BSE Sensex rose 1276.66 points or 2.25% to 58,065.47 and the CNX Nifty was up by 386.95 points or 2.29% to 17,274.30.

The US markets ended lower on Wednesday as traders looked to cash in on the strong gains posted early in the week amid lingering concerns about the outlook for the global economy. Central banks around the world appear poised to continue raising interest in the months ahead, potentially tipping the global economy into a recession as they seek to combat elevated inflation. A rebound by treasury yields also weighed on the markets, with the yield on the benchmark ten-year note regaining ground after moving notably lower over the two previous sessions. On the sectoral front, Telecom stocks showed a significant move to the downside on the day, dragging the NYSE Arca North American Telecom Index down by 2.8 percent. Interest rate-sensitive utilities and commercial real estate stocks also saw considerable weakness, with the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index tumbling by 2.6 percent and 1.9 percent, respectively. On the economic data front, the Institute for Supply Management released a report showing a modest slowdown in the pace of growth in US service sector activity in the month of September. The ISM said its services PMI edged down to 56.7 in September from 56.9 in August, although a reading above 50 still indicates growth in the sector. Street had expected the index to dip to 56.0. Meanwhile, with the value of imports showing a notable decrease, the Commerce Department released a report showing the U.S. trade deficit narrowed by more than expected in the month of August. The Commerce Department said the trade deficit narrowed to $67.4 billion in August from a revised $70.5 billion in July. Street had expected the deficit to shrink to $68.0 billion from the $70.6 billion originally reported for the previous month. The narrower than expected trade deficit in August represents the smallest trade deficit since hitting $66.6 billion in May 2021.

Crude oil futures ended higher on Wednesday after the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+, agreed to impose deep output cuts. OPEC+ decided to reduce production by 2 million barrels per day from November. Further, data showing a drop in US crude inventories in the week ended September 30 contributed as well to the surge in oil prices. Data from US Energy Information Administration (EIA) showed crude oil inventories in the US dropped by 1.356 million barrels last week, as against expectations for an increase of 2.052 million barrels. Benchmark crude oil futures for November delivery rose $1.24 or 1.4 percent at $87.76 a barrel on the New York Mercantile Exchange. Brent crude for December delivery surged $1.61 or about 1.74 percent to settle at $93.41 (Provisional) a barrel on London's Intercontinental Exchange.

Reversing previous session drubbing, Indian rupee appreciated significantly against dollar on Tuesday amid heavy buying in domestic equities and weakness in the greenback. Traders were energized as foreign investors turned net buyers after a gap of eight days of being net sellers. The foreign portfolio investors bought equities worth 590.58, according to National Stock Exchange data. Sentiments were also upbeat with Icra Ratings' statement that credit quality of corporates has strengthened further in the first half of the current fiscal with rating upgrades being more than three times that of downgrades, carrying on with the momentum since early FY22. On the global front, dollar slid on Tuesday as U.S. treasury yields paused in a relentless climb higher, providing brief relief to share markets and helping the euro and sterling move further off multi-year lows. Finally, the rupee ended at 81.62 (Provisional), stronger by 20 paisa from its previous close of 81.82 on Monday.

The FIIs as per Tuesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 19922.80 crore against gross selling of Rs 18645.20 crore, while in the debt segment, the gross purchase was of Rs 193.40 crore against gross selling of Rs 197.61 crore. Besides, in the hybrid segment, the gross buying was of Rs 20.41 crore against gross selling of Rs 37.11 crore.

The US markets ended lower on Wednesday unable to sustain a late-day surge, after data showing strong U.S. labor demand again suggested the Federal Reserve will keep interest rates higher for longer. Asian markets are trading mostly in green on Thursday despite the broadly negative cues from global markets overnight. Indian markets surged more than two percent in a broad rally on Tuesday, amid a rebound across global markets. Trading remained closed on Wednesday on account of Dusshera. Today, markets are likely to open in green tracking gains in Asian peers. The Street will monitor the services PMI data for September, while the weekly F&O expiry may also sway investor sentiment. Some support will come as the IMF said recent tightening actions by many central banks around the world will help to prevent high inflation from becoming entrenched. Also, foreign institutional investors (FIIs) remained net buyers to the tune of Rs 1,344.63 crore on October 4, as per provisional data available on the NSE. Traders may take note of report that Commerce and Industry Minister Piyush Goyal will meet different export promotion councils on October 7 to discuss ways to promote the growth rate in the country's outbound shipments. The meeting assumes significance as India's exports contracted by 3.52 per cent to $32.62 billion in September against $33.81 billion in the same month last year, while the trade deficit widened to $26.72 billion during the last month. However, there may be some cautiousness as the World Trade Organization (WTO) slashed its global trade growth forecast for 2023, stating that elevated commodity prices and rising interest rates would curb import demand, and warned of a likely contraction if the conflict in Ukraine escalates. Meanwhile, according to the RBI data, India Inc's foreign commercial borrowings in August this year rose by nearly 4.6 per cent to $2.98 billion. Sugar industry stocks will be in focus as the government said India's sugar exports rose 57 per cent to 109.8 lakh tonnes during 2021-22 marketing year ended September, resulting in foreign currency inflow worth about Rs 40,000 crore into the country. Besides, India has emerged as the world's largest producer and consumer of sugar and its second largest exporter. There will be some reaction in aviation industry stocks as recognising that an efficient and strong civil aviation sector is vital for the economic development of the country, the Department of Financial Services (DFS) has modified the Emergency Credit Line Guarantee Scheme (ECLGS) to enhance the maximum loan amount eligibility for airlines. The oil producers and marketing companies stocks will be in limelight as crude oil prices jumped over 3 per cent overnight after OPEC+ agreed to its deepest cuts (2 million barrel per day) to production since the 2020 COVID pandemic.

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

Nifty Top volumes

• Tata Motors is planning to introduce four wheel drive technology in electric versions of its sports utility vehicles going ahead. 
• Britannia Industries' wholly owned subsidiary -- Britannia and Associates (Dubai) has acquired entire stake in Catalyst Britania Brands. 
• Bharti Airtel has unveiled India's first immersive Virtual Reality advertisement powered by 5G. 
• Larsen & Toubro's construction arm -- L&T construction has won bagged multiple orders in India and abroad for its Power Transmission & Distribution Business.