Indian equity benchmarks snapped a two-day winning run and ended with losses of around three fourth of a percent on Monday, amid escalating geopolitical tensions in the Middle East and surging crude oil prices overseas. Benchmarks made a gap-down opening and stayed in red throughout the day as traders remained cautious after the RBI data showed that India's forex reserves drop by $3.79 billion to $586.91 billion for the week ended September 29. Besides, foreign fund outflows dented domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 90.29 crore on October 6, 2023. Traders also remained on sidelines ahead of Index of industrial production (IIP) data for August and Consumer price index (CPI) data for September slated to be announced on October 12. Traders paid no heed towards the Reserve Bank of India's (RBI) bi-monthly consumer confidence survey (CCS) showing that consumer confidence for the September reverted to its recovery path after a brief pause in July 2023 round of the survey. The current situation index (CSI) reached a four-year high on the back of respondents' better assessment of current general economic situation and employment conditions in September 2023. Meanwhile, the commerce ministry's arm Directorate General of Trade Remedies (DGTR) has recommended an anti-dumping duty of up to 82 per cent on imports of wheel loaders from China for five years to protect domestic players. Finally, the BSE Sensex fell 483.24 points or 0.73% to 65,512.39 and the CNX Nifty was down by 141.15 points or 0.72% to 19,512.35.

The US markets ended higher on Monday as worries about interest rates eased after Federal Reserve Vice Chair Philip Jefferson said the central bank needs to proceed carefully to balance the risk of tightening too much. The mood turned a bit positive thereafter. However, rising geopolitical crisis in the Middle East hurt sentiment and set up a weak start for the markets, and stocks mostly struggled till noon. The mood was cautious with investors awaiting the inflation data, due later in the week. The inflation data could have a significant impact on the outlook for interest rates amid recent concerns the Federal Reserve will keep rates at an elevated level longer than previously anticipated. On the sectoral front, energy stocks gained as oil prices surged amid concerns about potential disruptions in supply due to the conflict in the Middle East. However, airline stocks ended sharply lower, weighed down by the conflict in the Middle East, and higher oil prices. In the stock specific developments, Northrop Grumman soared 11 percent. Marathon Oil, CF Industries, Conoco Philips, Axon Enterprise, Exxon Mobil, Baker Hughes, Universal Health Services, Textron and Chevron gained 2.7 to 6.5 percent. United Airlines Holdings, Delta Airlines, Carnival, Solaredge Technologies and American Airlines ended lower by 4 to 5 percent.

Crude oil futures ended sharply higher on Monday amid concerns about disruptions to global oil supplies owing to escalating tensions in the Middle East. The battle between Israel and the Palestinian militan group Hamas has taken over 1,100 lives so far. Although the Israel and Palestinian territories are not oil producers, the Middle Eastern region accounts for almost a third of global supply. Besides, the upward revision in forecast for global oil demand for the medium and long term by OPEC contributed as well to the sharp uptick in crude oil prices. Benchmark crude oil futures for November delivery rose $3.59 or about 4.3 percent to settle at $86.38 a barrel on the New York Mercantile Exchange. Brent crude for December delivery surged $3.57 or about 4.2 percent to settle at $88.15 a barrel on London's Intercontinental Exchange.

Indian rupee ended slightly lower on Monday amid a weak trend in domestic equities and surging crude oil prices in the international markets. Traders were cautious as the RBI data showed that India's forex reserves drop by $3.79 billion to $586.91 billion for the week ended September 29. On the global front, dollar and Japanese yen inched higher on Monday as military clashes between Israel and the Palestinian Islamist group Hamas deepened political uncertainty across the Middle East. Besides, rouble slumped to a more than 18-month low against the dollar on Monday past the 102 mark, still hampered by reduced foreign currency supply and struggling to latch on to higher oil prices as the violence in Israel hurt risk appetite. Finally, the rupee ended at 83.28 (Provisional), weaker by 1 paisa from its previous close of 83.27 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 6928.92 crore against gross selling of Rs 6658.32 crore, while in the debt segment, the gross purchase was of Rs 1754.03 crore with gross sales of Rs 743.13 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.20 crore against gross selling of Rs 5.22 crore.

The US markets ended higher on Monday as investors digested the latest news about the Israel-Hamas conflict. Asian markets are trading mostly in green on Tuesday tracking overnight gains on Wall Street. Indian markets ended significantly lower on Monday as oil prices surged due to escalating geopolitical tensions in the Middle East. Today, start of the session is likely to be in green following gains in global markets after two US Fed officials hinted that rates may have peaked. Traders will be taking encouragement as the National Sample Survey Office (NSSO) data showed the unemployment rate for persons aged 15 years and above in urban areas declined to 6.6 per cent during April-June 2023 from 7.6 per cent a year ago. Joblessness was high in April-June 2022 mainly due to the staggering impact of Covid-related restrictions in the country. Investors will be eyeing in the inflation data to be out later in the week for more directional cues. Some support will come with a private report that a pick-up in private investment is an imperative for driving India's growth. The report said with the government trying to bring down the fiscal deficit and the likelihood of subsidy bills going up, public capex-which seems to have led to the uptick in real-investment growth recently-may come down. There are expectations that Indian retail inflation likely eased to 5.50% last month, within the Reserve Bank of India's (RBI) tolerance band, on moderating food price rises and government subsidies that offset a surge in the cost of crude oil. However, some cautiousness may come amid foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 997.76 crore on October 9, 2023. Meanwhile, the next round of negotiations for a trade agreement between India and South American nation Peru will start from October 10. Textile industry stocks will be in focus as Cotton Association of India (CAI) said cotton exports are estimated to decline 64 per cent in 2022-23 marketing year ended September due to higher prices of the commodity in the domestic market. There will be some reaction in energy related stocks as the Organization of the Petroleum Exporting Countries (Opec) in its 2023 World Oil Outlook said that India's primary energy demand will nearly more than double to 38.5 million barrels of oil equivalent per day (mboe/d) in 2045.

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

Nifty Top volumes

• Tata Steel's Indian business has registered 3.96% rise in output at 4.99 MT in Q2FY24 as compared to 4.80 MT it had produced during Q2FY23. 
• Bajaj Finserv's subsidiary -- Bajaj Markets has partnered with India Shelter. 
• Tata Motors has commenced bookings for the highly anticipated new Harrier and Safari models. 
• Abu Dhabi Investment Authority's wholly owned subsidiary has planned to invest Rs 4,966.80 crore into Reliance Retail Ventures, a subsidiary of Reliance Industries.