Indian equity benchmarks settled lower for the second consecutive day on Thursday, due to losses in Metal, Energy and Oil & Gas stocks. Markets made a gap down opening as provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 1,831.84 crore on October 18.  Market sentiments were also hurt by escalating tensions in the Middle East, which triggered volatility in oil prices and a selloff in global stocks. Traders took a note of report that the Directorate General of Goods and Services Tax Intelligence (DGGI) has detected tax evasion amounting to Rs 1.36 trillion in the current financial year, recovering Rs 14,108 crore. This figure includes 1,040 cases of bogus input tax credit, valued at Rs 14,000 crore. So far, 91 individuals involved in fraud have been apprehended. However, key indices managed to trim some losses in afternoon deals, as traders took some support with a private report expecting GDP growth in the current fiscal to be in the range of 6.5-6.8 per cent primarily due to upcoming festive spending as well as higher government expenditure before the national elections mid-next year. Some support also came as Union Minister of State for Food Processing Industries and Jal Shakti Prahlad Singh Patel has said that India is one of the fastest-growing economies with many investment opportunities, especially in the food processing sector. The minister also noted that World Food India event is an effort towards projecting potential of the sector before global stakeholders. But, markets failed to erase all the losses and ended lower as some cautiousness remained among traders with a private report stating that India's central bank has urged lenders to tighten controls on tiny personal loans following a surge in borrowing by low income consumers and may impose stricter measures to avert risks of a blowout in defaults. Finally, the BSE Sensex fell 247.78 points or 0.38% to 65,629.24 and the CNX Nifty was down by 46.40 points or 0.24% to 19,624.70.

The US markets ended lower on Thursday after Federal Reserve Chair Jerome Powell delivered highly anticipated remarks at an Economic Club of New York luncheon. Powell argued in prepared remarks that inflation is still too high and warned additional monetary policy tightening may be needed. Powell said In any case, inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal. Powell described the current stance of monetary policy as restrictive and reiterated Fed officials are willing to keeping policy restrictive until they are confident inflation is on a downward path. Citing recent data showing the resilience of economic growth and demand for labor, Powell also warned additional monetary policy tightening could be needed. Treasury yields moved higher following Powell's remarks, extending the upward trend seen over the past few sessions and once again reaching sixteen-year highs. The increase in yields also came as the Labor Department released a report showing initial jobless claims unexpectedly declined to a nearly nine-month low in the week ended October 14th. The report said initial jobless claims fell to 198,000, a decrease of 13,000 from the previous week's revised level of 211,000. Street had expected jobless claims to inch up to 212,000 from the 209,000 originally reported for the previous week. On the economic data front, interest rate-sensitive commercial real estate stocks saw substantial weakness on the day, dragging the Dow Jones U.S. Real Estate Index down by 2.4 percent. Considerable weakness also emerged among computer hardware stocks, as reflected by the 2.0 percent slump by the NYSE Arca Computer Hardware Index.  

Crude oil futures ended higher on Thursday, magnifying their previous session's rally, as Israel reportedly prepared to move into Gaza to fight against Hamas. Further, a weak dollar supported oil prices. The dollar eased after Federal Reserve Chair Jerome Powell failed to signal a hike at the central bank's rate decision, due early next month. However, oil prices fell earlier in the session, after the United States' decision to ease crude sanctions against Venezuela offset potential supply disruptions amid the tensions in the Middle East. Benchmark crude oil futures for November delivery rose $1.05 or 1.2 percent to settle at $89.37 a barrel on the New York Mercantile Exchange. Brent crude for December delivery surged $0.88 or about 1 percent to settle at $ 92.38 a barrel on London's Intercontinental Exchange.    

Rupee settled higher against dollar on Thursday tracking softening crude prices in the international markets amid lingering geopolitical uncertainties. Traders got support as private report expects GDP growth in the current fiscal to be in the range of 6.5-6.8 per cent primarily due to upcoming festive spending as well as higher government expenditure before the national elections mid-next year. Besides, Union Minister of State for Food Processing Industries and Jal Shakti Prahlad Singh Patel said that India is one of the fastest-growing economies with many investment opportunities, especially in the food processing sector. The minister also noted that World Food India event is an effort towards projecting potential of the sector before global stakeholders. On the global front, dollar held firm against major currencies on Thursday and gained against more volatile ones, underpinned by the U.S. 10-year yield nearing the 5% level and before remarks by Federal Reserve Chair Jerome Powell at a discussion on the economy. Finally, the rupee ended at 83.23 (Provisional), stronger by 5 paisa from its previous close of 83.28 on Wednesday.

The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 9562.43 crore against gross selling of Rs 11552.04 crore, while in the debt segment, the gross purchase was of Rs 714.81 crore with gross sales of Rs 325.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 32.27 crore against gross selling of Rs 27.07 crore.

The US markets ended lower on Thursday with shares of Tesla falling after its results and Treasury yields surging as Federal Reserve Chair Jerome Powell spoke about monetary policy and investors worried whether interest rates would stay higher for longer. Asian markets are trading in red on Friday after Japan's September inflation data, which came in at 3 percent, the 18th straight month above the BOJ's 2 percent target, as well as China's one-year and five-year loan prime rates. Indian markets ended lower for a second straight day Thursday as investors remained cautious of the worsening geopolitical conditions in the Middle East. Today, markets are likely to open in red tracking sell-off in global markets as risk aversion prevails due to renewed Middle East tensions, Fed Chair Jerome Powell's cautious remarks on further rate hikes and a surge in oil prices over the $90-a barrel mark. There are signs that the Israel-Hamas war is spreading. U.S. troops have been repeatedly attacked in Iraq and Syria in recent days. Foreign fund outflows likely to dent sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 1,093.47 crore on October 19. Traders may take note of World Bank chief economist Indermit Gill's statement that middle-income countries like India need to make policies based on reliable data to get into the league of high-income nations in next 3-4 decades as achieving sustainable growth will become harder. However, some support may come as Union Food Secretary Sanjeev Chopra on Thursday said prices of essential food items will remain stable during the festival season. He added the decision on allowing sugar exports during the current 2023-24 marketing year (October-September) will be taken after the agriculture ministry comes out with the production estimates of sugarcane. Meanwhile, the government has announced that it will allow unrestricted imports of laptops and tablets, signaling a departure from its previous stringent stance. Banking stocks will be in focus as according to a Reserve Bank of India (RBI) study banks in India are well placed to withstand headwinds from the current phase of hardening of yields. The timely creation of investment fluctuation reserve (IFR) provides them adequate buffers to withstand trading losses. There will be some reaction in insurance industry stocks with a private report that the health insurance segment grew by 24.4 per cent in the first half of FY24 to Rs 54,713.52 crore from Rs 43,981.54 crore in H1FY23, driving the growth of the overall non-life insurance industry. The surge in the price of group health premiums acted as a key contributing factor.

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

Nifty Top volumes

• ITC has entered into definitive agreements to acquire further 2,286 Equity Shares of Rs 10 each of Delectable Technologies, subject to completion of agreed conditions precedent.
• Bajaj Auto has reported 17.48% rise in its consolidated net profit at Rs 2020.05 crore for Q2FY24 as compared to Rs 1719.44 crore for the same quarter in the previous year. 
• Bharti Airtel has extended 5G coverage to 50 districts of Rajasthan, empowering over 2.7 million customers to enjoy the power of 5G. 
• LTIMindtree has reported 2.25% marginal fall in its consolidated net profit at Rs 1162.30 crore for Q2FY24 as compared to Rs 1189.00 crore for the same quarter in the previous year.