Indian equity benchmarks continued their downward slide on Wednesday and ended with losses of over a percent, in tandem with weak trends in global markets ahead of the US Federal Reserve's interest rate decision. Weak trend in index majors HDFC Bank, JSW Steel and Reliance Industries also added to the overall bearish trend. Markets made a gap-down opening and stayed in red for whole day as traders were concerned after 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, showing the effect of the slowdown in global economic activity. Some cautiousness also crept in with exchange data showing that foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,236.51 crore on Monday. Markets extended fall in late afternoon deals, as traders were cautious after the Reserve Bank of India (RBI) in its monthly bulletin said that a shift by state governments to the Old Pension Scheme (OPS) will be fiscally unsustainable and a major step backwards. Traders also took a note of the Global Trade Research Initiative's (GTRI) report stating that banking issues like reluctance to process forex received through alternate channels and high processing fees are hindering the growth of e-commerce exports from India, and there is a need to bring mindset change to unlock the sector's potential. Market participants paid no heed towards the Finance Ministry's statement that 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. Finally, the BSE Sensex fell 796.00 points or 1.18% to 66,800.84 and the CNX Nifty down by 231.90 points or 1.15% to 19,901.40.

The US markets ended lower on Wednesday after the Federal Reserve announced its widely expected decision to leave interest rates unchanged but raised its forecast for rates at the end of next year. The Fed said it decided to maintain the target range for the federal funds rate at 5.25 to 5.50 percent after raising rates by 25 basis points in July. However, the central bank's latest projections suggest Fed officials expect one more rate hike this year, forecasting a median rate of 5.6 percent by the end of 2023. While the forecast for the end of the year was unchanged from June, the latest projections also indicate officials expect rates to remain higher for longer than previously anticipated. The forecast for rates at the end of 2024 was raised to 5.1 percent from 4.6 percent in June, while the outlook for rates at the end of 2025 was increased to 3.9 percent from 3.4 percent. Expectations for rates to remain higher for longer may reflect an improved assessment of the economy, with the Fed's statement saying economic activity has been expanding at a solid pace compared to the moderate pace described in July. On sectoral front, Semiconductor stocks showed a significant move to the downside, dragging the Philadelphia Semiconductor Index down by 1.7 percent to its lowest closing level in almost four months. Software and networking stocks also saw considerable weakness on the day, contributing to the steep drop by the tech-heavy Nasdaq. Weakness also emerged among energy stocks, while gold stocks saw notable strength amid an increase by the price of the precious metal.

Crude oil futures ended lower on Wednesday after the Federal Reserve left the interest rate unchanged, but projected a rate increase by the end of the year and keeping interest rates at an elevated level through 2024. Oil prices fell despite data showing a drop in crude inventories in the U.S. in the week ended September 15. Data released by the U.S. Energy Information Administration (EIA) showed crude inventories in the U.S. dropped by 2.136 million barrels last week versus forecasts for an increase of 0.25 million barrels. The data said gasoline stockpiles declined by 0.831 million barrels last week versus forecasts for a 1.1 million barrel rise, while distillate stockpiles dropped by 2.867 million barrels. Benchmark crude oil futures for October delivery fell $0.92 or 1.00 percent to settle at $90.28 a barrel on the New York Mercantile Exchange. Brent crude for November delivery declined $0.81 or 0.86 percent to settle at $ 93.53 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against the US dollar on Wednesday aided by losses in global crude prices and a weak dollar ahead of the US Federal Reserve's policy decision. Besides, possible intervention by the central bank to check volatility in currency markets also helped the domestic unit. Traders took support with Finance Ministry's statement that net direct tax collection grew 23.51 per cent to over Rs 8.65 lakh crore till mid-September 2023, on higher advance tax mop-up from corporates. On the global front, the ringgit ended higher against the US dollar on Wednesday ahead of the US Federal Open Market Committee (FOMC) interest rate decision due later. Finally, the rupee ended at 83.11 (Provisional), stronger by 21 paise from its previous close of 83.32 on Monday.

The FIIs as per Wednesday'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 7973.46 crore against gross selling of Rs 8719.04 crore, while in the debt segment, the gross purchase was of Rs 1409.02 crore with gross sales of Rs 1204.03 crore. Besides, in the hybrid segment, the gross buying was of Rs 41.64 crore against gross selling of Rs 53.54 crore.

The US markets ended lower on Wednesday after the US Federal Reserve held key interest rates unchanged. Asian markets are trading in red on Thursday following overnight losses on Wall Street. Indian markets ended lower for the second consecutive session on Wednesday amid selling in heavyweights and across the sectors, barring power stocks. Today, markets likely to start session in red terrain amid global sell-off after the U.S. Federal Reserve held interest rates steady but stiffened its hawkish stance, with a further rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected. Foreign fund outflows likely to dent domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 3,110.69 crore on September 20. There will be some cautiousness as the latest payroll data from the Employees' Provident Fund Organisation (EPFO) indicates a slight dip in the creation of new formal jobs in July, signalling stagnation in the labour market. New monthly subscribers to the employees' provident fund (EPF) declined by 1.2 per cent to 1.02 million in July, compared to 1.03 million in June. However, some support may come later in the day as India Ratings and Research upwardly revised its FY24 real GDP growth estimate to 6.2 per cent from the 5.9 per cent expected earlier. The domestic ratings agency attributed its revision to a variety of factors, including the government's capital expenditure, deleveraged balance sheets of India Inc and banks, subdued global commodity prices and the prospect of private capital expenditure picking up. Sugar stocks will be in focus as the India Sugar Mills Association (ISMA) said there will be no scarcity in supply of sugar in the next season (October-September), thanks to an adequate buffer and an increase in production prospects in Uttar Pradesh, Maharashtra and Karnataka. There will be some reaction in stocks related to space sector as Finance Minister Nirmala Sitharaman said that the Indian Space Research Organisation (ISRO) through the success of Chandrayaan 3 has achieved innovation along with sustainability and the space sector is backed by reforms which should attract more funds as the government aims to institutionalise the private sector via its policy. Meanwhile, EMS, an infrastructure player that provides sewerage solutions, is likely to see a strong listing on September 21.

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

Nifty Top volumes

• Tata Motors has planned to increase prices of its commercial vehicles, effective October 1, 2023, up to 3%. 
• Bajaj Finance has raised Rs 500 crore through allotment of 50,000 Secured Redeemable NCDs, at the face value of Rs 1 lakh each. 
• Tech Mahindra has inaugurated a local innovation centre in Espoo, Finland. 
• TCS has entered into a strategic partnership with BankID BankAxept AS, Norway's national payment and electronic identity systems.