After exhibiting lacklustre movement for a major part of the trading day on Thursday, Indian equity benchmarks weakened more in late trade to end near day's low points, owing to selling pressure in Consumer Durables, Utilities and Auto stocks.  Markets made negative start and stayed in red for whole day as provisional data available on the NSE showed foreign institutional investors have net sold shares worth Rs 386.06 crore on November 16, 2022. Sentiments remained downbeat, as credit rating agency Crisil in its latest report has said that as much as 43% of India's micro, small and medium enterprises (MSME) universe by value is expected to remain below the pre-pandemic (fiscal 2020) level in terms of earnings before interest, tax, depreciation and amortisation (EBITDA) margin this fiscal (FY23) because of inability to completely pass on the high prices in some commodities as well as an unfavourable exchange rate. Traders paid no heed towards the commerce ministry's data showing that India's exports to the UAE, with which a free trade agreement was implemented on May 1, rose by 17.6 per cent to about $18 billion during April-October this fiscal. Market participants also overlooked Reserve Bank of India (RBI) Governor Shaktikanta Das' statement that despite challenges, the Indian banking sector has been resilient and improved in various performance parameters. At the same time though, he asked public as well as private sector banks to remain watchful of the evolving macroeconomic situation and take necessary mitigating measures to minimise their impact on balance sheets and contain financial stability risks. Meanwhile, Commerce and Industry Minister Piyush Goyal said that India will be launching negotiations for a free trade agreement (FTA) with a region next week. He said that negotiations are going on with countries, including the UK, European Union, Canada and Israel. Finally, the BSE Sensex fell 230.12 points or 0.37% to 61,750.60 and the CNX Nifty was down by 65.75 points or 0.36% to 18,343.90.

The US markets ended in red on Thursday on Hawkish comments from Federal Reserve officials also dented recent optimism about the outlook for interest rates. St. Louis Fed President James Bullard suggested the central bank's aggressive interest rate hikes have had only limited effects on observed inflation. Bullard said the Fed will need to continue increasing interest rates to reach a level that could be considered sufficiently restrictive. Some weakness also prevailed in the markets as report released by the Federal Reserve Bank of Philadelphia showed regional manufacturing activity unexpectedly contracted at a faster rate in the month of November. The Philly Fed said its diffusion index for current activity tumbled to a negative 19.4 in November from a negative 8.7 in October, with a negative reading indicating a contraction in regional manufacturing activity. The decrease by the Philly Fed index came as a surprise to participants, who had expected the index to inch up to a negative 6.2. Meanwhile, new residential construction in the U.S. showed a notable decrease in the month of October, the Commerce Department revealed in a report released. The report said housing starts tumbled by 4.2 percent to an annual rate of 1.425 million in October after falling by 1.3 percent to an upwardly revised rate of 1.488 million in September. Street had expected housing starts to slump by 2.0 percent to an annual rate of 1.410 million from the 1.439 million originally reported for the previous month. On the sectoral front, Gold stock showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2.0 percent. Considerable weakness was also visible among utilities stocks, as reflected by the 1.9 percent drop by the Dow Jones Utility Average.

Crude oil futures ended deeply in red on Thursday on demand concerns after mounting COVID-19 cases in China. Sentiments remained weak as the International Energy Agency (IEA) has once again lowered its global oil demand growth estimate for next year, citing significant uncertainties for the oil market such as weak economic growth in China, Europe's energy crisis and a strong dollar. Meanwhile, fears of more aggressive hikes in U.S. interest rates also dampened sentiments. Benchmark crude oil futures for December delivery fell $3.95 or about 4.6 percent at $81.64 a barrel on the New York Mercantile Exchange. Brent crude for January delivery dropped $2.92 or about 3.14 percent to settle at $89.94 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee tumbled against dollar on Thursday on the back of muted trend in domestic equities. Sentiments were down-beat after credit rating agency Crisil in its latest report has said that as much as 43% of India's micro, small and medium enterprises (MSME) universe by value is expected to remain below the pre-pandemic (fiscal 2020) level in terms of earnings before interest, tax, depreciation and amortisation (EBITDA) margin this fiscal (FY23) because of inability to completely pass on the high prices in some commodities as well as an unfavourable exchange rate. On the global front, dollar rose on Thursday as investors digested mixed U.S. economic data, while the British pound changed direction and slipped ahead of the government's budget update. Finally, the rupee ended at 81.63 (Provisional), weaker by 37 paisa from its previous close of 81.26 on Wednesday.

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 8059.38 crore against gross selling of Rs 8020.48 crore, while in the debt segment, the gross purchase was of Rs 1271.59 crore against gross selling of Rs 276.98 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.38 crore against gross selling of Rs 29.21 crore.

The US markets ended lower on Thursday as hawkish comments from a US Federal Reserve official and data showing the labor market remained tight led some investors to worry about more aggressive interest rate hikes. Asian markets are trading mostly higher on Friday as Japan's core consumer price index for October rose 3.6% compared to a year ago, higher than expected and at the fastest pace in 40 years. Indian markets ended lower on Thursday in line with weak global market trends. Today, markets are likely to get slightly positive start amid steady foreign flows and softened crude oil prices. According to the provisional data available on the NSE, foreign institutional investors (FIIs) net bought shares worth Rs 618.37 crore on November 17. However, there may be some cautiousness as Moody's Investors Service said a combination of weak growth in advanced economies, persistent inflationary pressures, the Russia-Ukraine conflict, tight financial conditions, and a subdued growth outlook for China will create a difficult environment for emerging markets (EM) in 2023. As regards India, Moody's said food and fuel remain the main drivers of inflation because they represent a larger share of the consumption basket. For example, rising food prices have contributed to almost half of the growth in headline inflation this year in India. Traders may be concerned with a private report stating that taking binding commitments on new issues like environment, labour and sustainability in the proposed free trade agreements (FTA), being negotiated by India, may hamper the country's exports in the future. Tea industry stocks will be in limelight as Tea Board data showed that exports of tea from India increased by 14.8 per cent to 140.28 million kilograms in the first eight months of the 2022 calendar year. There will be some buzz in the sugar industry stocks as industry body ISMA said India has entered into a contract for export of about 35 lakh tonnes of sugar so far in the ongoing 2022-23 season, out of which 2,00,000 tonnes have been shipped last month. Banking stocks will be in focus as S&P Global Ratings said polarisation in the performance of Indian banks will persist as many large public sector banks are still saddled with weak assets, high credit costs, and poor earnings. There will be some reaction in edible oil industry stocks as industry body SEA said the country's export of oilmeal, used as animal feed, rose 38.45 per cent to 19.84 lakh tonnes during the April-October period of the current fiscal on sharp rise in shipment of rapeseed meal. Aviation industry stocks will be in watch as the civil aviation ministry decided to double the per-flight regional connectivity levy it collects from airlines to Rs 10,000 from January.

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

Nifty Top volumes

• SBI has signed a 150 million euro (Rs 1,240 crore) loan agreement with the German development bank KfW for funding solar projects. 
• Wipro has inked pact with employee representatives on setting up a European Works Council. 
• Coal India is aiming 50 million tonne sales through the e-auction route in the second half of the current fiscal. 
• Tata Motors has bagged a prestigious order of 1000 buses from Haryana Roadways.