Indian equity benchmarks swung between losses and gains to end flat on Monday in a highly volatile trade amid a weak trend in global markets. After making a cautious start, key gauges fell sharply as continued foreign fund outflows dented domestic sentiments. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,326.74 crore on Friday, according to exchange data. FIIs have pulled out over Rs 10,000 crore from Indian equities in the first three weeks of September. Traders were concerned as the Reserve Bank said India's foreign exchange reserves declined $867 million to $593.037 billion in the week ended September 15. Traders took note of report that S&P Global Ratings retained India's growth forecast for current fiscal at 6 per cent citing slowing world economy, rising risk of subnormal monsoons and delayed effect of rate hike. It sees the recent spike in vegetable price inflation as being temporary, but revised up the full fiscal retail inflation forecast to 5.5 per cent, from 5 per cent earlier, on higher global oil prices. However, key gauges erased initial losses and were trading in green in afternoon deals, as traders found some support with Chief Economic Advisor V Anantha Nageswaran's statement that the inclusion of Indian government bonds in JP Morgan's emerging market debt index is expected to broaden India's investor base, potentially appreciate the rupee, and make it easier for Indian financial institutions to lend money. Besides, underlining the Government's commitment to improving the ease of doing business in India, making it easier to start and run businesses, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush Goyal has highlighted the success of the Startup India initiative as the nation has witnessed remarkable growth from 450 startups in 2016 to over 1 lakh today, making India the world's third-largest startup ecosystem. But, markets failed to hold gains and ended flat as some anxiety remained among traders with report stating that India's exports to the European Union (EU), worth $37 billion, could be impacted due to the trade bloc's proposed Carbon Border Adjustment Mechanism (CBAM) and other green initiatives. The impact would translate into 43 per cent of India's exports to the EU, which is among India's key export markets after the United States (US). Finally, the BSE Sensex rose 14.54 points or 0.02% to 66,023.69 and the CNX Nifty up by 0.30 points to 19,674.55.

The US markets ended higher on Monday. The higher close on markets partly reflected bargain hunting, with traders picking up stocks at reduced levels following the steep drop seen last week. The turnarounds by the Nasdaq and the S&P 500 came after they ended last Friday's trading at their lower closing levels in well over three months. However, buying interest remained somewhat subdued as ongoing concerns about the outlook for interest rates continued to hang over the markets following last week's Federal Reserve meeting. The Fed left interest rates unchanged as widely expected but forecast another rate hike before the end of the year as well as keeping rates at elevated levels for longer than previously anticipated. Later in the week, the Commerce Department is due to release its report on personal income and spending in the month of August, which includes readings on inflation said to be preferred by the Fed. On the sectoral front, Energy stocks turned in a strong performance despite a modest decrease by the price of crude oil. While crude for November delivery fell $0.35 to $89.68, the Philadelphia Oil Service Index advanced by 1.7 percent and the NYSE Arca Oil Index climbed by 1.3 percent. Natural gas, retail and transportation stocks also moved to the upside, while airline and gold stocks showed notable moves to the downside. While the NYSE Arca Airline Index slid 1.2 percent to its lowest closing level in six months, the NYSE Arca Gold Bugs Index dropped by 1.0 percent amid a modest decrease by the price of gold.

Crude oil futures ended lower on Monday on stronger dollar. The dollar rose to new multi-month high, riding on hawkish comments on interest rates from the Federal Reserve and other central banks. Crude oil prices also fell as concerns about energy demand and interest rates offset optimism about a tighter supply outlook. Benchmark crude oil futures for November delivery lost $0.35 or 0.4 percent to settle at $89.68 a barrel on the New York Mercantile Exchange. However, Brent crude for November delivery added $0.02 to settle at $ 93.29 a barrel on London's Intercontinental Exchange.

Indian rupee ended lower on Monday taking cues from subdued equity market sentiment and a firm American currency against major rivals overseas. Withdrawal of foreign funds from domestic equities and upward movement in crude oil prices also weighed on the Indian currency. According to exchange data, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,326.74 crore on Friday. FIIs have pulled out over Rs 10,000 crore from Indian equities in the first three weeks of September. Traders were concerned as the Reserve Bank said India's foreign exchange reserves declined $867 million to $593.037 billion in the week ended September 15. On the global front, dollar rose against the yen to an almost 11-month high on Monday, keeping traders focused on Japan intervention risks after the Bank of Japan and Governor Kazuo Ueda quashed hopes of any imminent move away from its stark ultra-loose monetary policy. Finally, the rupee ended at 83.13 (Provisional), weaker by 19 paise from its previous close of 82.94 on Friday.

The FIIs as per Monday'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 10990.28 crore against gross selling of Rs 12155.54 crore, while in the debt segment, the gross purchase was of Rs 1393.93 crore with gross sales of Rs 1026.85 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.94 crore against gross selling of Rs 5.36 crore.

The US markets ended higher on Monday on account of bargain hunting, with traders pick up stocks at reduced levels following the steep drop seen last week. Asian markets are trading in red on Tuesday ahead of key economic data releases and amid renewed anxieties about China's property market. Indian markets ended volatile trading session marginally in green on Monday. Today, the markets are likely to get negative start as US Treasury yields scaled a fresh 16-year peak amid weakness in Asian counterparts. Some volatility may remain in the markets ahead of the monthly F&O expiry this week and the release of infrastructure output data for August due later in the week. Foreign fund outflows likely to dampen sentiments in the markets. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 2,333.03 crore on September 25, 2023. Also, foreign portfolio investors' (FPIs') net investment in the domestic debt market this month, so far, has sharply declined amid the rise in US Treasury yields and the narrowing of the spread with Indian government papers. FPI inflows in debt stood at Rs 125 crore as of September 24; the figure was Rs 7,645 crore for August. Traders may take note of the Global Trade Research Initiative's (GTRI) statement that steps like streamlining port and customs operations, and setting up of national trade network will help Indian firms integrate with global value chains and add $1.2 trillion in the country's foreign trade by 2030. Meanwhile, the market regulator has extended the short-term additional surveillance measure (ASM) and trade-for-trade settlement framework to small and medium enterprises (SME) stocks, a ciruclar from the exchanges informed. This revised framework will be made available by October 3. There will be some buzz in banking stocks as S&P Global Market Intelligence said Indian banks will continue attracting global investment from investors looking for better returns as credit growth, improved margins and stable asset quality boost the country's lenders. Nuvama Wealth Management, formerly known as Edelweiss Securities, will be re-listed on the BSE and the NSE today.

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

Nifty Top volumes

• Tata Motors has launched its third Registered Vehicle Scrapping Facility, in Surat, Gujarat. 
• Power Grid Corporation of India has received approval for raising of upto Rs 2,250 crore in FY 23-24 in second tranche to part finance its capex requirement. 
• TCS has expanded its partnership with the Standard Bank Group to centralize and standardize its custody and securities settlement operations in over 15 markets with the TCS BaNCS Global Securities Processing Platform.
• Hero MotoCorp has unveiled the new price of the Karizma XMR at Rs 1,79,900 onwards (Ex-showroom, Delhi) with effect from October 1, 2023.