Indian equity benchmarks ended Tuesday's session flat with negative bias after witnessed volatility. Key gauges made positive start, as traders found some solace with Finance Minister Nirmala Sitharaman's statement that while the necessary stimulus for growth would continue, her ministry and the Reserve Bank of India (RBI) would work on a pathway to maintain the growth momentum for the next 25 years in order to make India an advanced economy. However, markets soon slipped in red in morning deals, as traders turned cautious as Finance Ministry in its report on India's external debt has said that India's external debt rose by 8.2 per cent year-on-year to $620.7 billion as of March 2022. It stated while 53.2 per cent of it was denominated in the US dollar, Indian rupee-denominated debt, estimated at 31.2 per cent, was the second largest. Some concern also came as exchange data showed foreign institutional investors (FIIs) offloaded shares worth Rs 811.75 crore on Monday. But, domestic markets recovered from their losses to trade in green in afternoon deals, taking support from Reserve Bank Governor Shaktikanta Das' statement that despite the latest headwinds arising from the Jackson Hole summit leading to extreme volatility, the country's banking system and financial markets are strong enough to withstand such pressures. Some optimism also came after credit rating agency Moody's has allotted a Baa3 rating for the Government of India with a stable outlook. India's credit profile reflects key strengths including its large and diversified economy with high growth potential, a relatively strong external position, and a stable domestic financing base for government debt. However, indices failed to hold gains and settled almost unchanged in a volatile trading session, in absence of any major trigger. Finally, the BSE Sensex fell 48.99 points or 0.08% to 59,196.99 and the CNX Nifty was down by 10.20 points or 0.06% to 17,655.60.

The US markets ended in red on Tuesday as traders expressed some uncertainty about the near-term outlook for the markets. Cautiousness on the day also came amid a surge in treasury yields, with the yield on the benchmark ten-year note jumping to its highest levels in almost three months. Further, potentially adding to the worries about interest rates, the Institute for Supply Management (ISM) released a report showing service sector activity in the US unexpectedly grew at a slightly faster rate in the month of August. The ISM said its services PMI inched up to 56.9 in August from 56.7 in July, with a reading above 50 indicating growth in the sector. The uptick surprised Participants, who had expected the index to dip to 55.1. The report is a positive sign for the economy but may have led to concerns the Federal Reserve will see the data as an indication that it can continue to aggressively raise interest rates. Besides, comments from Fed officials, including Chair Jerome Powell, are likely to attract attention in the coming days along with the central bank's Beige Book. On the sectoral front, Tobacco stocks showed a significant move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 2.4 percent to its lowest closing level in well over a year. Considerable weakness also emerged among natural gas stocks, as reflected by the 1.7 percent decrease by the NYSE Arca Natural Gas Index. The weakness in the sector came amid a steep drop by the price of natural gas. Networking stocks also saw notable weakness on the day, with the NYSE Arca Networking Index falling by 1.6 percent to a one-month closing low.

Crude oil futures ended almost flat with positive bias on Tuesday as the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced that they will slash oil production by 100,000 barrels per day (bpd) in October, roughly 0.1% of global demand, reflecting expectations of slower global economic growth. OPEC+ leaders confirmed they can meet at any time, before a next agreed gathering on October 5, 2022, if production needs to be altered again. However, worries about outlook for energy demand amid rising fears of a recession, and the dollar's uptick limited oil's rise. The dollar index climbed to a fresh 20-year high at 110.55 before paring some gains. Benchmark crude oil futures for October delivery rose by about a penny or about 0.09 percent to settle at $86.88 a barrel on the New York Mercantile Exchange. However, Brent crude for November delivery fell $2.91 or about 3 percent to settle at $92.83 a barrel on London's Intercontinental Exchange.   

Indian Rupee ended almost flat against US dollar on Tuesday amid a lacklustre trend in domestic equities. Traders remained cautious as Finance Ministry in its report on India's external debt has said that India's external debt rose by 8.2 per cent year-on-year to $620.7 billion as of March 2022. It stated while 53.2 per cent of it was denominated in the US dollar, Indian rupee-denominated debt, estimated at 31.2 per cent, was the second largest. However, some support came with Finance Minister Nirmala Sitharaman's statement that while the necessary stimulus for growth would continue, her ministry and the Reserve Bank of India (RBI) would work on a pathway to maintain the growth momentum for the next 25 years in order to make India an advanced economy. On the global front, the dollar took a breather on Tuesday after a sweeping rally, easing slightly from milestone highs on the euro, yen and sterling, but not too far as recession stalks Europe, and US interest rates are poised for sharp rises. Finally, the rupee ended at 79.77 (Provisional), stronger by 1 paisa from its previous close of 79.78 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 5838.26 crore against gross selling of Rs 5574.64 crore, while in the debt segment, the gross purchase was of Rs 661.62 crore against gross selling of Rs 538.90 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.67 crore against gross selling of Rs 20.35 crore.

The US markets ended lower on Tuesday as traders assessed fresh economic data in volatile trading. Asian markets are trading mostly in red on Wednesday as investors anticipate the Federal Reserve to give its summary on current economic conditions, also known as the Beige Book. Indian markets closed modestly lower on Tuesday after investors offloaded FMCG, IT and banking stocks in the last hour of trade amid mixed global cues. Today, the benchmark indices are likely to make negative start following bearish cues from global markets. Traders will be concerned as domestic ratings agency Icra said India's current account deficit (CAD) will widen to 5 per cent of the GDP in the September quarter due to higher merchandise trade deficit. The trade deficit has doubled to $28.7 billion for August due to a 36.8 per cent expansion in imports and a 1.2 per cent decline in export earnings. There will be some cautiousness with a private report estimating that India's consumer price index (CPI) firmed to 6.9% year-on-year in August, while core inflation likely stood at 6%. However, some support may come later in the day as Moody's Investors Service said India's economic recovery is unlikely to be derailed by rising challenges to the global economy, higher inflation and tightening financial conditions,  and affirmed a stable outlook for the country's rating Baa3. Also, Moody's saw the Indian economy expanding by 7.6 per cent in the current fiscal compared to 8.7 per cent growth in the last financial year that ended on March 31. For 2023-24, it estimates a 6.3 per cent GDP growth. Traders may take note of report that the Union Finance Ministry released the sixth monthly instalment of Post Devolution Revenue Deficit (PDRD) grant of Rs 7,183.42 crore to 14 states. The grant has been released as per the recommendations of the 15th Finance Commission. Meanwhile, foreign institutional investors (FIIs) have net bought shares worth Rs 1,144.53 crore on September 6, as per provisional data available on the NSE. Fertiliser sector stocks will be in focus with a private report that government may look to privatise PSUs in the sector. According to the PSE policy, 2021, the government will look at leaving non-strategic sectors, such as fertiliser, steel and tourism, by privatising or closing PSUs. There will be some reaction in power companies stocks with report that the deadline to comply with sulphur dioxide (SO2) emission norms for power companies has been extended by two more years, as per a government notification issued on September 6. Renewable energy stocks will be in limelight as Crisil Ratings said receivables of leading renewable companies will shrink 20 per cent during this financial year. Leading renewable energy (RE) companies are set to see their receivables reduce a fifth from 180 days a year ago to 140 days as of March 2023, a level last visible pre-COVID.

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

Nifty Top volumes

• NTPC has acquired 600-MW Jhabua Power Plant for Rs 925 crore, which is its first such deal through insolvency proceedings. 
• HDFC and ERGO International AG's JV --HDFC ERGO General Insurance Company is partnering with Google Cloud to create a technology platform that will help digitize insurance purchasing and service in the country. 
• Reliance Industries has entered into definitive agreements with SenseHawk Inc. for acquiring 79.4% stake of SenseHawk, through primary infusion and secondary purchase, for a total consideration of $32 million.
• RBI has selected HDFC Bank and Precision Biometric India for testing their 'on tap' retail payments applications under the regulatory sandbox scheme.