Indian equity benchmarks ended in red terrain on Monday as profit-taking came into play in Telecom, Realty and TECK stocks. Markets made a negative start and stayed in red for whole day, as traders were concerned after India's merchandise trade deficit widened to a 10-month high of $24.16 billion in August. India's exports declined by 6.86 per cent to $34.48 billion in August this year as against $37.02 billion in the same month last year. Imports too declined by 5.23 per cent to $58.64 billion as against $61.88 billion recorded in August 2022.  Some concern also came as latest data by the Reserve Bank of India (RBI) showed India's foreign exchange reserve declined by $5 billion to $594 billion in the previous week on the back of a fall in foreign currency assets. Key gauges extended some losses in late afternoon deals, even as exchange data showing that foreign Institutional Investors (FIIs) were buyers on Friday as they bought equities worth Rs 164.42 crore. The street overlooked reports that Fitch Ratings upwardly revised the global growth forecast for 2023 by 10 basis points to 2.5 per cent, reflecting surprising resilience so far this year in the US, Japan, and emerging markets excluding China. Meanwhile, in order to encourage greater utilization of the PM GatiShakti National Master Plan (NMP) amongst the States/UTs, the Logistics Division, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry is organizing weekly meetings. Finally, the BSE Sensex fell 241.79 points or 0.36% to 67,596.84 and the CNX Nifty down by 59.05 points or 0.29% to 20,133.30.

The US markets ended lower on Tuesday as traders remained on edge ahead of the Federal Reserve's monetary policy announcement on Wednesday. While the Fed is widely expected to leave interest rates unchanged, traders were paying close attention to the accompanying statement and the central bank's projections for clues about the outlook for rates. Negative sentiment was also generated in reaction to a Commerce Department report showing a sharp pullback in U.S. housing starts in the month of August. The report said housing starts plunged by 11.3 percent to an annual rate of 1.283 million in August after jumping by 2.0 percent to a revised rate of 1.447 million in July. Street had expected housing starts to decrease to an annual rate of 1.440 million from the 1.452 million originally reported for the previous month. Meanwhile, the Commerce Department said building permits surged by 6.9 percent to an annual rate of 1.543 million in August after inching up by 0.1 percent to a revised rate of 1.443 million in July. Building permits, an indicator of future housing demand, were expected to rise to an annual rate of 1.445 million from the 1.442 million originally reported for the previous month. With the sharp increase, building permits reached their highest level since hitting an annual rate of 1.555 million last October. On the sectoral front, gold stocks showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2.1 percent. The index pulled back off its best closing level in over a month. The pullback by gold stocks came despite a slight increase by the price of the precious metal, with gold for December delivery inching up $0.30 to $1,953.70 an ounce.

Crude oil futures ended lower on Tuesday despite the U.S. Energy Information Administration (EIA) said on Monday in its report that oil output in the U.S. will likely fall to 9.393 million barrels per day in October, the lowest level since May 2023.  Meanwhile, traders await inventory data from the American Petroleum Institute (API) and Energy Information Administration (EIA). The EIA is scheduled to release its inventory data on Wednesday. Benchmark crude oil futures for October delivery fell $0.28 or 0.3 percent to settle at $91.20 a barrel on the New York Mercantile Exchange. Brent crude for November delivery lost $0.09 or 0.10 percent to settle at $ 94.34 a barrel on London's Intercontinental Exchange.

The Indian rupee ended weaker against the US dollar on Monday mainly due to risk aversion in global markets and rising crude oil prices. Besides, a strong American currency against key rivals overseas and a negative trend in domestic equities weighed on investor sentiments. Investors overlooked reports that Fitch Ratings upwardly revised the global growth forecast for 2023 by 10 basis points to 2.5 per cent, reflecting surprising resilience so far this year in the US, Japan, and emerging markets excluding China. On the global front, the US dollar hovered near high on Monday as traders looked ahead to interest rate decisions from the Federal Reserve, the Bank of England and the Bank of Japan this week. Finally, the rupee ended at 83.32 (Provisional), weaker by 16 paise from its previous close of 83.16 on Friday.

The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 33012.61 crore against gross selling of Rs 32711.77 crore, while in the debt segment, the gross purchase was of Rs 418.94 crore with gross sales of Rs 962.89 crore. Besides, in the hybrid segment, the gross buying was of Rs 193.18 crore against gross selling of Rs 246.11 crore.

The US markets ended in red on Tuesday as investors looked for any change in communication from the Federal Reserve. Asian markets are trading mostly lower on Wednesday as elevated oil prices raised inflation concerns. Indian markets ended lower on Monday largely due to profit taking after recent gains. Markets were closed on Tuesday for Ganesh Chaturthi. Today, markets likely to get gap-down opening amid weak cues from the overseas markets as investors await the Federal Reserve's monetary policy announcement later in the day. Traders will be concerned as showing the effect of the slowdown in global economic activity, the equity foreign direct investment (FDI) into India declined sharply to $13.9 billion in April-July 2023 from $22.04 billion a year ago. The net FDI, inflows minus outflows, declined from $17.28 billion in April-July 2022 to $5.70 billion in April-July 2023 on account of moderating gross FDI and a rise in repatriation. However, some support may come later in the day as the Finance Ministry said the net direct tax collection increased 23.51 per cent to over Rs 8.65 lakh crore till mid-September on higher advance tax mop-up from corporates. The net collections have reached 47.45 per cent of the full-year budget estimates (BE) of Rs 18.23 lakh crore. Besides, an article published in the latest RBI bulletin said amid weakening global prospects, the Indian economy is gaining strength led by domestic private consumption and fixed investment with strong public sector capital expenditure. Meanwhile, as per a report, the government may soon tweak the production-linked incentive scheme for pharmaceuticals, drones and textiles sectors to encourage investment and boost manufacturing. These sectors have been identified after inter-ministerial consultations on the performance of the scheme for various products. IT stocks will be in focus with a private report that a few large Indian IT services companies are expected to see a recovery in revenue growth at 9-10 per cent in FY25 from 4-5 per cent projected in FY24. This is due to a ramp-up in recently-signed mega deals, a strong pipeline of cost take-outs, and improvement in discretionary spending. Shares of airline companies are likely to be in focus amid reports that Akasa Air may be forced to shut down amid mass resignations by pilots. There will be some reaction in EV company's stocks as Electric vehicle (EV) sales in India topped the 1 million mark in less than nine months in 2023, a milestone that took an entire year in 2022.   According to data from the Ministry of Road Transport and Highways' Vahan Dashboard, 1,037,011 EVs were registered with regional transport offices till September 19.

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

Nifty Top volumes

• Tata Steel and the UK government have inked a joint agreement on a proposal to invest in state-of-the-art Electric Arc Furnace steelmaking at the Port Talbot site. 
• State Bank of India has introduced a digital facility for NRIs to effortlessly open NRE and NRO accounts (both savings and current accounts) through its mobile app YONO. 
• Tata Consultancy Services has achieved the Amazon Web Services Automotive Competency.
• Wipro has partnered with ServiceNow to create Wipro CyberTransform - Intelligent ServiceNow Risk and Security Solutions.