Indian equity benchmarks ended flat with a negative bias on Tuesday as investors exercised caution in the wake of weak global cues. Markets made a cautious start and remained in a narrow band throughout the day as the provisional data available on the NSE showed that foreign institutional investors (FII) offloaded shares worth net Rs 2,333.03 crore on September 25, 2023. Cautiousness ahead of the monthly F&O expiry this week also kept underlying sentiment cautious. However, losses remained capped as traders took support with S&P Global Market Intelligence stating that 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. Some support also came with 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. This revised framework will be made available by October 3. Finally, the BSE Sensex fell 78.22 points or 0.12% to 65,945.47 and the CNX Nifty down by 9.85 points or 0.05% to 19,664.70.

The US markets ended deeply in red on Tuesday with Nasdaq settling cut of over one and half percent amid ongoing concerns about the outlook for interest rates. Further, worries about the economic outlook also weighed on markets following the release of separate reports showing a sharp pullback in new home sales and a significant deterioration in consumer confidence. The Commerce Department released a report showing new home sales plummeted by 8.7 percent to an annual rate of 675,000 in August after soaring by 8.0 percent to an upwardly revised rate of 739,000 in July. Street had expected new home sales to decrease to an annual rate of 700,000 from the 714,000 originally reported for the previous month. With the upward revision, the annual rate of new home sales in July was the highest since hitting 773,000 in February 2022. A separate report released by the Conference Board showed its consumer confidence index tumbled to 103.0 in September from an upwardly revised 108.7 in August. Street had expected the consumer confidence index to edge down to 105.8 from the 106.1 originally reported for the previous month. On the sectoral front, Gold stocks moved sharply lower over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 3.0 percent to its lowest closing level in over six months. The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery falling $16.80 to $1,919.80 an ounce.

Crude oil futures ended higher on Tuesday as ongoing concerns about tight supplies overshadowed worries about the global economic outlook. Russia and Saudi Arabia's recent decision to extend production cuts until the end of the year continued to support oil prices. Meanwhile, traders shrugged off some disappointing economic data as well as warnings the Federal Reserve may raise interest higher than currently anticipated. Benchmark crude oil futures for November delivery rose $0.71 or 0.8 percent to settle at $90.39 a barrel on the New York Mercantile Exchange. Brent crude for November delivery gained $0.67 or 0.71 percent to settle at $93.96 a barrel on London's Intercontinental Exchange.

Indian rupee extended losses for the second straight day on Tuesday due to rising crude oil prices and a strong American currency against major rivals overseas. Subdued equity markets and withdrawal of foreign funds also weighed on the domestic currency.  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. On the global front, the dollar stood by 10-month highs against a basket of major currencies on Tuesday, supported by US bond yields scaling 16-year peaks, while the yen tiptoed deeper into the intervention danger zone. Finally, the rupee ended at 83.28 (Provisional), weaker by 15 paise from its previous close of 83.13 on Monday.

The FIIs as per Tuesday'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 9198.59 crore against gross selling of Rs 10585.21 crore, while in the debt segment, the gross purchase was of Rs 520.62 crore with gross sales of Rs 457.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.03 crore against gross selling of Rs 7.59 crore.

The US markets ended lower on Tuesday as bond yields continue to hover near 16-year highs, and fears of Federal government shutdown resurfaced. Asian markets are trading mixed on Wednesday after data showed China's industrial profits surged 17.2 percent from a year earlier in August. Indian markets ended flat with negative bias on Tuesday as traders avoided taking any long position ahead of monthly F&O expiry later in the week and amid higher US bond yields. Today, start of the session is likely to be negative tracking weakness in global markets. Persistent foreign fund outflows likely to dent market sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 693.47 crore on September 26. As per a private report, FIIs have sold about $1.6 billion in Indian equities in September, the most since January 2023. The report added this trend was driven by elevated valuations in the domestic market and negative global cues. However, some support may come as the Centre extended the tenure of the export-boosting scheme Remission of Duties and Taxes on Exported Products (RoDTEP) for nine more months, amid faltering exports and tepid external demand. Traders may take note of report that the central government has decided to stick to its market borrowing plan of Rs 6.55 trillion in the second half (October-March) of financial year 2023-24 (H2FY24), brushing aside pressure from tepid revenue growth and rising subsidy burden in the pre-election year. This will include the issuance of sovereign green bonds worth Rs 20,000 crore, as against the Rs 16,000 crore maiden green bonds issued in FY23. Meanwhile, Union Minister of Health and Family Welfare Mansukh Mandaviya has launched the Rs 5,000 crore Promotion of Research and Innovation in Pharma and MedTech sector (PRIP) scheme, which aims to transform India's pharma medtech industry from a cost-based one to innovation-based. Shares of online gaming are likely to remain in focus amid reports that the tax demand from these firms could top Rs 1 lakh crore.  There will be some reaction in diamonds industry related stocks as rating agency Icra said India's export of cut and polished diamonds is projected to decline by 22 per cent to $17.2 billion in the current fiscal due to weakened demand from the key consuming nations. Signature Global and Sai Silks (Kalamandir) shares may list on the exchanges on September 27.

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

Nifty Top volumes

• Infosys has collaborated with Microsoft to jointly develop industry leading solutions that leverage Infosys Topaz, Azure OpenAI Service and Azure Cognitive Services. 
• Titan Company's flagship brand -- Tanishq has launched its brand-new store in Ahmedabad, Gujarat. 
• The RBI has imposed a monetary penalty of Rs 1.30 crore on State Bank of India for non-compliance with certain directions issued by RBI. 
• Axis Bank is planning to extend its branch network in the Gujarat state by adding 28 more branches and 69 new ATMs this financial year, as it aims to enhance accessibility for the people of Gujarat.