Indian equity benchmarks witnessed selling pressure for third consecutive day on Friday on the back of weak global cues and soaring crude oil prices. Markets opened lower and languished in negative territory through the session as traders got anxious with provisional data from the National Stock Exchange (NSE) showing that foreign institutional investors (FII) sold shares worth Rs 1,093.47 crore on October 19. Traders also remained cautious with Reserve Bank of India -- Governor Shaktikanta Das' statement that the global economy is now facing a triad of challenges. He added that the recent surge in crude oil prices and bond yield is a major challenge. Traders paid no heed towards Union Food Secretary Sanjeev Chopra' statement that 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. Traders also overlooked International Monetary Fund's (IMF) statement that India has room to absorb additional expenditure towards subsidies and rural unemployment programme without raising its fiscal deficit target from 5.9% set for the current financial year. Meanwhile, World Bank chief economist Indermit Gill said 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. Finally, the BSE Sensex fell 231.62 points or 0.35% to 65,397.62 and the CNX Nifty was down by 82.05 points or 0.42% to 19,542.65.

Extending their previous sessions' southward journey, the US markets ended in red on Friday with Nasdaq falling over one and half a percent amid ongoing concerns about the recent surge in treasury yields to sixteen-year highs. The yield on the benchmark ten-year note climbed above 5 percent for the first time since July 2007 but has given back ground since then. The recent advance by yields reflects continued worries about the outlook for interest rates, with the Federal Reserve signaling rates will remain higher for longer than previously anticipated. Meanwhile, during a speech on Thursday, Fed Chair Jerome Powell described inflation as still too high and warned additional monetary policy tightening may be needed. Powell also reiterated Fed officials are willing to keeping policy restrictive until they are confident inflation is on a downward path. Some cautiousness also prevailed among market participants amid fears that the Israel-Hamas war may escalate into a broader regional crisis. Israeli Defense Minister Yoav Gallant told troops gathered at the Gaza border on Thursday that they would soon see the Palestinian enclave from inside. Additionally, reports emerged that U.S. troops are being targeted at several military bases across Iraq and Syria, while a U.S. Navy warship destroyed cruise missiles and drones fired toward Israel by Houthi rebels in Yemen. On the sectoral front, banking stocks showed a substantial move to the downside on the day, dragging the KBW Bank Index down by 3.1 percent to a five-month closing low. Significant weakness was also visible among oil service stocks, as reflected by the 2.3 percent slump by the Philadelphia Oil Service Index.

Crude oil futures gave up initial gains and ended lower on Friday. In early trade, oil prices moved upward amid fears the Israel-Hamas war may escalate into a broader regional crisis. Israeli Defense Minister Yoav Gallant told troops gathered at the Gaza border on Thursday that they would soon see the Palestinian enclave from inside. However, gains got vanished over the course of the session as traders expressed concerns about the outlook for global demand. Benchmark crude oil futures for November delivery fell $0.62 or 0.7 percent to settle at $88.75 a barrel on the New York Mercantile Exchange. Brent crude for December delivery declined 22 cents or 0.2 percent to settle at $93.16 a barrel on London's Intercontinental Exchange.

Rupee ended flat on Friday amid negative equity markets and rising crude oil prices. Traders were worried after the surge in the 10-year US benchmark yield overnight to briefly touch 5% has raised borrowing costs around the world. Besides, Reserve Bank of India -- Governor Shaktikanta Das said that the global economy is now facing a triad of challenges. He added that the recent surge in crude oil prices and bond yield is a major challenge. On the global front, Russian rouble climbed to a one-month high past 96 to the dollar on Friday, supported by high oil prices and the promise of stronger foreign currency supply as exporters prepare for month-end tax payments. dollar briefly touched the closely watched 150 level against the yen on Friday, encouraged by a rise in U.S. 10-year Treasury yields towards 5% after Federal Reserve Chair Jerome Powell suggested there was scope for more rate rises. Finally, the rupee ended flat with its previous close of 83.13 on Thursday.

The FIIs as per Friday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 10243.24 crore against gross selling of Rs 11195.17 crore, while in the debt segment, the gross purchase was of Rs 850.24 crore with gross sales of Rs 866.07 crore. Besides, in the hybrid segment, the gross buying was of Rs 1374.59 crore against gross selling of Rs 1377.41 crore.

The US markets ended lower on Friday with technology and financial shares among the biggest drags, as investors worried about more interest rate hikes and the Israel-Hamas conflict spreading. Asian markets are trading in red on Monday ahead of a week of inflation readings from across the region and South Korea's third-quarter gross domestic product numbers. Indian markets extended their losses for third straight session on Friday as global markets slumped on concerns over rising bond yields and escalating tensions in the Middle East. Today, start of the holiday shortened week is likely to be cautious amid rising US yields and Israel-Gaza tensions. There will be some cautiousness as the Reserve Bank of India's data (October 2023 bulletin) said net foreign direct investment (FDI) in India, inflows minus outflows, declined sharply in April-August this year to $2.99 billion from $18.03 billion in the same period last year on moderation in global activities and a rise in repatriation. Traders may take note of Finance Minister Nirmala Sitharaman's statement that even though India's debt levels are not very high compared global average, the Central government is looking at ways to bring down the liabilities so as not to burden future generations. However, foreign fund inflows likely to support markets. Provisional data from the National Stock Exchange (NSE) showed, foreign institutional investors (FII) bought shares worth Rs 456.21 crore on October 20. Some support may come as the RBI data showed that after multiple weeks of decline, India's forex reserves increased by $1.153 billion to $585.895 billion during the week ended October 13. In the previous reporting week, the overall reserves had dropped by $2.166 billion to $584.742 billion. Meanwhile, the US has emerged as India's biggest trading partner during the first half of the current financial year despite global economic uncertainties and declining exports and imports, according to government data. According to the provisional data of the commerce ministry, the bilateral trade between India and the US has declined by 11.3 per cent to $59.67 billion during April-September 2023 against $67.28 billion in the same period last year. Banking stocks will be in focus with report that Finance Ministry would consider capital infusion in three loss-making public sector general insurance companies based on their financial performance of nine months. The infusion if required would be made in the fourth quarter of the current financial year. There will be some reaction in cement industry stocks with a private report that India's leading cement manufacturers are gearing up to add over 200 million tonnes of new capacity in the coming years, aiming for cost leadership through a variety of measures. These range from optimising supply chains and raw materials to efficient energy usage and capital costs. E-commerce companies' stocks will be in limelight with a private report that E-commerce companies registered around 19 per cent increase in gross sales to almost Rs 47,000 crore in the first week of the festive season, which concluded earlier this week. Investors will keep close eye on earnings from Indian Inc.

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

Nifty Top volumes

• ITC has reported 6.11% rise in its consolidated net profit at Rs 4955.90 crore for Q2FY24 as compared to Rs 4670.32 crore for the same quarter in the previous year. 
• Tata Motors and Freight Commerce Solutions have signed a SSA and a SHA for the acquisition of 26.79% stake in Freight Tiger for a consideration of Rs 150 crore.
• Bharti Airtel has extended 5G coverage to all 22 districts of Jammu & Kashmir, empowering over 0.9 million customers to enjoy the power of 5G.
• Kotak Mahindra Bank has received approval from RBI to acquire 100% issued and paid up capital of Sonata Finance for a total consideration of around Rs 537 crore.