Indian equity benchmarks fell for the second straight day on Thursday, tracking a broad sell-off in global markets as investors reacted to the 75bps interest rate hike by the US Federal Reserve. Moreover, the weekly F&O derivatives expiry added to the volatility in the stock markets. Markets made a negative start and stayed in red for whole day, as traders remained cautious with per provisional data available on the NSE showing that foreign institutional investors (FIIs) have net sold shares worth Rs 461.04 crore on September 21, 2022. Some pessimism also came with private report stating that India's headline retail inflation is expected to rise to a five-month high of 7.4% in September, with the risk of going higher if the momentum of food and vegetable prices picks up further in the rest of the month. However, key gauges managed to trim most of their initial losses in late afternoon deals, taking support from global rating agency S&P stating that even though the US and the Euro zone are headed to recession, India is unlikely to face the impact given the not so coupled nature of its economy with the global economy. Traders overlooked the Federation of Indian Export Organisations (FIEO), the apex body of India's export promotion councils, stated that Indian exports to the six Gulf Cooperation Council countries (GCC) grew by 44 per cent to about $43.9 billion in 2021-22 fiscal year compared to previous fiscal's $27.8 billion with the UAE leading the trade with a remarkable 68 per cent growth. Finally, the BSE Sensex fell 337.06 points or 0.57% to 59,119.72 and the CNX Nifty was down by 88.55 points or 0.50% to 17,629.80.

The US markets ended lower on Thursday. The weakness on markets reflected continued concerns about the economic outlook following the Federal Reserve's third straight 75 basis point interest rate hike on Wednesday. While the Fed's economic projections provided a clearer outlook for future rate hikes, traders remain concerned about the impact the aggressive rate increases will have on the economy. Several other central banks around the world followed the Fed's lead, including the Bank of England, which raised interest rates by 50 basis points in a split decision. The next Fed meeting is over a month away, giving traders a lot of time to analyze incoming economic data and try to determine the effect of the recent string of rate hikes. On the sectoral front, Airline stocks extended the nosedive seen over the two previous sessions, with the NYSE Arca Airline Index plummeting by 2.8 percent to its lowest closing level in over two months. Banking stocks also saw significant weakness on the day, dragging the KBW Bank Index down by 2.5 percent to a two-month closing low. On the economic data front, potentially signaling a recession, the Conference Board released a report showing its index of leading US economic indicators declined for the sixth consecutive month in August. The Conference Board said its leading economic index fell by 0.3 percent in August after sliding by a revised 0.5 percent in July. Street had expected the leading economic index to come in unchanged compared to the 0.4 percent drop originally reported for the previous month. Meanwhile, after reporting modest decreases in first-time claims for US unemployment benefits for five straight weeks, the Labor Department released a report showing an uptick in jobless claims in the week ended September 17th. The report showed initial jobless claims inched up to 213,000, an increase of 5,000 from the previous week's revised level of 208,000. Street had expected jobless claims to edge up to 218,000 from the 213,000 originally reported for the previous week.

Crude oil futures ended higher on Thursday on concerns about tight supplies amid geopolitical tensions. Expectations of a jump in demand from China supported oil prices. A private report said that a few refineries in China, including private player Zhejiang Petrochemicals, are considering increasing utilization by up to 10% m/m in October amid stronger demand domestically. Besides, Russian President Vladimir Putin's decision to call up 300,000 reservists to fight in Ukraine, backing up a plan to annex parts of the country, also added to geopolitical concerns. Benchmark crude oil futures for November delivery surged $0.55 or 0.7 percent at $83.49 a barrel on the New York Mercantile Exchange. Brent crude for November delivery gained $0.55 or about 0.61 percent to settle at $90.38 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee concluded substantially weaker to hit new all-time low against US dollar on Thursday, after US Federal Reserve's interest rate hike and its hawkish stance. Sentiments were fragile as recession worries gripped world markets after Federal Reserve officials raised interest rates by 75 bps for the third consecutive time and forecast they would reach 4.6 percent in 2023, stepping up their fight to curb inflation that's persisted near the highest levels since the 1980s. Muted trend in domestic equities and firm crude oil prices too weighed on the rupee. On the global front, Japanese yen strengthened on Thursday after authorities intervened in the foreign exchange market to shore up the battered currency for the first time since 1998, although trading was choppy. Finally, the rupee ended at 80.86 (Provisional), weaker by 90 paisa from its previous close of 79.96 on Wednesday.

The FIIs as per Thursday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 7043.83 crore against gross selling of Rs 7322.33 crore, while in the debt segment, the gross purchase was of Rs 239.76 crore against gross selling of Rs 1298.14 crore. Besides, in the hybrid segment, the gross buying was of Rs 23.58 crore against gross selling of Rs 26.77 crore.

The US markets ended lower on Thursday as investors reacted to the Federal Reserve's latest aggressive move to rein in inflation by selling growth stocks, including technology companies. Asian markets are trading in red on Friday as investors continue to weigh the Federal Reserve's aggressive stance. Indian markets closed lower on Thursday, extending losses for a second day running amid weak global cues and the expiry of weekly F&O contracts. Today, markets are likely to continue their lackluster trade for yet another day with negative start following weakness in global markets and weak domestic sentiment due to a sharp fall in the rupee.  There will be some cautiousness as ASSOCHAM said India Inc is bracing itself for yet another policy rate hike by the RBI Monetary Policy Committee in the range of 35-50 basis points as the move seems unavoidable in the wake of the global monetary tightening to limit the impact of inflation. Besides, foreign institutional investors (FIIs) have net sold shares worth Rs 2,509.55 crore on September 22, as per provisional data available on the NSE. However, some respite may come later in the day as Union Finance Minister Nirmala Sitharaman said the government was making efforts to keep inflation under 4 per cent and steps were being taken to ensure people get essential goods at fair price and on time. Traders may take note of IT Minister Ashwini Vaishnaw's statement that the government is investing nearly $30 billion to ensure last-mile network accessibility for 4G and 5G in every village across the country and build a robust digital infrastructure in the rural areas. Meanwhile, Capital markets regulator Sebi has allowed emerging investment vehicles, Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT), to issue commercial papers. IT stocks will be in focus amid worries of a slowdown in the world biggest economy. To add to the woes, Accenture's has issued its first-quarter guidance of $15.20 billion - $15.75 billion, much below the street expectations. There will be some reaction in microfinance sector stocks as the Microfinance Institutions Network (MFIN) said the microfinance sector expanded by 24% to Rs 2.93 lakh crore, with banks retaining their leadership position holding 38.4% market share.

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

Nifty Top volumes

• State Bank of India has raised Rs 4,000 crore through Basel III compliant Tier 2 bonds on September 21, 2022 at coupon rate of 7.57 per cent. 
• Tata Motors launched the CAMO Edition for its young and vibrant brand, Tata Punch. 
• HDFC Bank has entered into a long-term partnership with London Stock Exchange group's Refinitiv for digital transformation, new customer acquisition and reduce costs. 
• Adani Ports and Special Economic Zone has bagged order in West Bengal for development of Tajpur deep sea port.