Indian equity benchmarks ended lower with losses of over half percent on Thursday, following heavy selling in Capital Goods, Banking and Financial Services stocks due to inflation and growth concerns. A weak rupee and rising crude prices also impacted the market sentiment. Key gauges made a negative start and stayed in red for whole day, as weak set of macro-economic data dampened sentiments. India's retail inflation spiked to 7.41% in September, mainly due to costlier food items. For the ninth month in a row, retail inflation has remained above the Reserve Bank of India's tolerance level of 6%. Also, India's industrial growth, as per the Index of Industrial Production (IIP), slid to an 18-month low of -0.8% in August from 2.2% in July. Some pessimism also came with rating agency Crisil's research wing stating that India Inc is expected to report a three per cent year-on-year decline in profits for the July-September period. It added that this fall in profitability will be the fourth straight quarter of the decline in profits for the listed companies. Sentiments remained weak in late afternoon deals, amid SBI Research in its latest Ecowrap report said that the unseasonal rains in different parts of India, particularly in cereal-producing states, could have a significantly large impact on cereal and vegetable prices. It also said India's retail inflation surged to 7.41 per cent in September, remaining above the Reserve Bank of India's mandated range of 2-6 per cent for the third straight quarter - nine straight months - largely due to a rise in food prices. Traders took note of Global rating agency S&P said India is facing a mixture of factors that may shake its sovereign credit metrics. Nevertheless, it conceded that strong economic growth and external balance sheet are expected to offset risks inherent in the growing external headwinds. But if the economy witnesses a prolonged downturn in real and nominal GDP growth, material downward pressure on the sovereign ratings could emerge, especially if large government deficits are left unchecked. Besides, sustained foreign capital outflows also weighed on investor sentiments. As per exchange data, foreign institutional investors (FIIs) remained net sellers in the Indian capital market on Wednesday as they sold shares worth Rs 542.36 crore. Finally, the BSE Sensex fell 390.58 points or 0.68% to 57,235.33 and the CNX Nifty was down by 109.25 points or 0.64% to 17,014.35.

The US markets ended sharply higher on Thursday, with Dow Jones Industrial Average settling over 800 points, as traders looked to pick up stocks at reduced levels following the early weakness, which dragged the major averages down to their lowest intraday levels since 2020. Traders have also felt concerns about inflation and higher interest rates have already been priced into the markets following the recent downward trend. However, the early sell-off on markets came following the release of the Labor Department's highly anticipated report on consumer price inflation in the month of September. The report showed consumer prices rose by more than expected in September, leading to a spike in treasury yields and ongoing concerns about the outlook for interest rates. The Labor Department said its consumer price index rose by 0.4 percent in September after inching up by 0.1 percent in August. Street had expected consumer prices to edge up by 0.2 percent. Excluding food and energy prices, core consumer prices climbed by 0.6 percent for the second month compared to expectations for a 0.5 percent advance. The report also showed the annual rate of growth by consumer prices slowed to 8.2 percent in September from 8.3 percent in August, although the annual rate of growth by core prices accelerated to a 40-year high of 6.6 percent from 6.3 percent. On the sectoral front, banking stocks helped lead the rebound on Wall Street, resulting in a 5.2 percent spike by the KBW Bank Index. The index rallied after hitting its lowest intraday level in almost two years in early trading. A sharp increase by the price of crude oil also contributed to significant strength among energy stocks, with crude for November delivery jumping $1.84 to $89.11 a barrel.

Crude oil futures ended sharply higher on Thursday as data showed a significant drop in distillate inventories in the US in the week ended October 7th. Data from the Energy Information Administration (EIA) showed that distillate stockpiles fell by 4.9 million barrels to 106.1 million barrels last week versus expectations for a 2 million-barrel drop. However, EIA showed crude inventories in the US rose by 9.9 million barrels last week. Meanwhile, gasoline stocks were up by 2 million barrels last week, compared to expectations for a 1.8 million barrel drop. Benchmark crude oil futures for November delivery rose $1.84 or 2.1 percent at $89.11 a barrel on the New York Mercantile Exchange. Brent crude for December delivery gained $2.30 or about 2.5 percent to settle at $94.75 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally weaker against dollar on Thursday, as investors were cautious ahead of US inflation data. Domestic traders were cautious after retail inflation based on Consumer Price Index (CPI) jumped to a five-month high of 7.41 percent in September 2022 mainly due to costlier food items. It is for the ninth month in a row that retail inflation has remained above the Reserve Bank of India's upper tolerance level of 6 percent. Besides, India's industrial production growth, measured in terms of the Index of Industrial Production (IIP), slipped to an 18-month low, contracting by 0.8 per cent in August, mainly due to a decline in output of the manufacturing and mining sectors. On the global front, Sterling rose on Thursday in volatile trade as investors awaited the impending deadline for the Bank of England to end an emergency bond-buying programme. Finally, the rupee ended at 82.34 (Provisional), weaker by 1 paisa from its previous close of 82.33 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 6256.39 crore against gross selling of Rs 6613.65 crore, while in the debt segment, the gross purchase was of Rs 1343.92 crore against gross selling of Rs 1230.14 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.67 crore against gross selling of Rs 21.83 crore.

The US markets ended significantly higher on Thursday as investors brushed aside higher-than-estimated headline inflation data of 8.2 per cent in September. Asian markets are trading in green on Friday taking the lead from Wall Street overnight as investors shook off a strong inflation report. Indian markets declined over half a per cent on Thursday due to selling in financials, auto and realty shares after five-month high inflation fanned rate hike fears. Today, start of session is likely to be gap up mirroring firm global cues. Investors will be looking ahead to the wholesale inflation data to be out later in the day. Traders will be taking encouragement as Union Finance Minister Nirmala Sitharaman said that India is setting the global benchmarks on the digital front and that there is a sense of confidence in the country that it will be able to face geopolitical and economic uncertainties and still perform. Some support will come as S&P Global Ratings said growth in large Asia Pacific economies like China, India and Indonesia will be less affected as their economies are more domestically oriented. Meanwhile, the Central government will soon launch 600 Pradhan Mantri Kisan Samriddhi Kendras, which will not just retail fertilisers but offer one-stop solutions to farmers in the form of crop advisories, soil- and seed-testing facilities, retailing seeds and pesticides, and even custom hiring of agricultural equipment and machines. However, traders may be concerned as foreign institutional investors (FIIs) net sold shares worth Rs 1,636.43 crore on October 13, as per provisional data available on the NSE. There may be some cautiousness as India failed to unseat the UK and missed being the fifth-largest economy by $10 billion in 2021-22. It'll have to wait another year before it gets that coveted spot in 2022-23, overtaking the UK by $27 billion. The International Monetary Fund's (IMF's) World Economic Outlook stated that by 2025-26 (FY26), the Indian economy would equal Germany's to be the fourth-largest. It would become the third-largest by 2027-28 (FY28), when it is projected to grow bigger than Japan. Auto stocks will be in focus as auto industry body Society of Indian Automobile Manufacturers said riding on the back of strong festive season demand, passenger vehicle wholesales in India increased 92 per cent to 3,07,389 units last month, as compared to the same month last year. Passenger vehicle (PV) dispatches from factories to dealerships in September 2021 stood at 1,60,212 units. There will be some reaction in infrastructure industry related stocks with report that the national highway construction bucked the trend in this fiscal year with 37 per cent year-on-year growth in September. The ministry of road transport and highways (MoRTH) constructed 647 kilometres of highways in the month, which is the second-highest that they've managed this fiscal year.

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

Nifty Top volumes

• Tata Motors has entered into a PPA with Tata Power for a 7 MW captive solar power project at its Pantnagar plant in Uttarakhand. 
• State Bank of India has surpassed Rs 6 lakh crore in assets under management in residential home loans segment.
• ITC's wholly owned subsidiary -- ITC Infotech India has incorporated wholly owned subsidiary in Brazil under the name of ITC Infotech Do Brasil. 
• Tech Mahindra has partnered with Foxconn-initiated MIH Consortium, an open EV alliance that promotes collaboration in the mobility industry.