Indian equity benchmarks ended lower by around a percent on Thursday amid the monthly derivatives (F&O) expiry and weakness in IT, FMCG and TECK stocks. After making a slightly positive start, benchmark indices slipped deeper into losses as the day progressed as persistent foreign fund outflows dented sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 354.35 crore on September 27. Some concerns also came with a private report that investment in Indian startups dropped to a five-year low in the third quarter of calendar year 2023, with funding declining by 54 per cent year-on-year to $1.5 billion. The funding also fell 29 per cent quarter-on-quarter. Sentiments remained dampened as Reserve Bank data showed that India's external debt rose marginally to $629.1 billion at June-end 2023, although the debt-GDP ratio declined. The debt rose by about $4.7 billion from $624.3 billion at March-end. Markets continued to trade deep in red in late afternoon session, amid reports stating that India's current account deficit (CAD) surged to $9.2 billion in the first quarter of 2023-24, more than seven times what it was in the preceding quarter. According to data released by the Reserve Bank of India (RBI), CAD in April-June amounted to 1.1 percent of GDP. Traders overlooked Fitch Ratings' statement that the inclusion of certain Indian sovereign bonds in key emerging-market bond indices managed by JP Morgan will support a diversification of the investor base for Indian government securities. Traders also paid no heed towards External Affairs Minister S Jaishankar's statement that in the next 25 years, the country's Amrit Kaal as espoused by Prime Minister Narendra Modi, India will strive to be a developed country and it is logical that it also seeks to be a global power. Finally, the BSE Sensex fell 610.37 points or 0.92% to 65,508.32 and the CNX Nifty down by 192.90 points or 0.98% to 19,523.55.

The US markets ended in green on Thursday as traders picked up stocks at reduced levels following recent weakness. Concerns about the outlook for interest rates have weighed on the markets in recent session, dragging the major averages down to their lowest levels in three months. A downturn by treasury yields also contributed to the strength among stocks, with the yield on the benchmark ten-year note giving back ground after reaching its highest levels since October 2007. Meanwhile, traders were also looking ahead to remarks by Federal Reserve Chair Jerome Powell, which kicked off just as the markets close. On the sectoral front, semiconductor stocks showed a strong move to the upside on the day, driving the Philadelphia Semiconductor Index up by 1.8 percent. Networking, housing and brokerage stocks also saw notable strength, while interest rate-sensitive utilities stocks saw further downside. On the economic data front, the Commerce Department released a report showing the pace of U.S. economic growth in the second quarter of 2023 was unrevised from the previous estimate. The Commerce Department said real gross domestic product increased by 2.1 percent in the second quarter, unrevised from the estimate provided last month. The unrevised reading matched street estimates. The unrevised GDP growth in the second quarter still reflects a slight slowdown compared to the 2.2 percent growth in the first quarter. A separate report released by the Labor Department showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended September 23rd. The Labor Department said initial jobless claims crept up to 204,000, an increase of 2,000 from the previous week's revised level of 202,000.

Crude oil futures ended sharply lower on Thursday on account of profit booking. Oil prices surged to more than 1-year high earlier in the day, riding on recent data showing a drop in crude inventories in the U.S. Data from Energy Information Administration (EIA) on Wednesday showed crude inventories in Cushing, Oklahoma dropped to 22 million barrels last week. Benchmark crude oil futures for November delivery dropped $1.97 or 2.1 percent to settle at $91.71 a barrel on the New York Mercantile Exchange. Brent crude for November delivery fell $1.26 or 1.3 percent to settle at $93.10 a barrel on London's Intercontinental Exchange.

Indian rupee appreciated against the dollar on Thursday aided by a correction in crude oil prices and the greenback. Traders got support after Fitch Ratings stated that the inclusion of certain Indian sovereign bonds in key emerging-market bond indices managed by JP Morgan will support a diversification of the investor base for Indian government securities. Investors ignored report stating that India's current account deficit (CAD) surged to $9.2 billion in the first quarter of 2023-24, more than seven times what it was in the preceding quarter. According to data released by the Reserve Bank of India (RBI), CAD in April-June amounted to 1.1 percent of GDP. On the global front, the dollar steadied near its highest level against a basket of its peers on Thursday, keeping the yen near a key intervention zone and the euro at an eight-month low, as U.S. longer-dated yields extended their rise. Finally, the rupee ended at 83.19 (Provisional), stronger by 3 paise from its previous close of 83.22 on Wednesday.

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 9974.62 crore against gross selling of Rs 12163.94 crore, while in the debt segment, the gross purchase was of Rs 945.39 crore with gross sales of Rs 1180.25 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.18 crore against gross selling of Rs 9.54 crore.

The US markets ended higher on Thursday after bond yields slipped from 16-year highs and crude prices pulled back from their highest level in more than a year. Asian markets are mostly in green on Friday in thin trade amid China's Golden week holiday. Indian markets ended significantly lower on Thursday amid the monthly derivatives (F&O) expiry, rising crude oil price, and weakness in IT share. Today, markets are likely to get flat-to-positive start amid overnight gains on Wall Street and sharp fall in crude oil prices. Some support will come as the figures released by the Reserve Bank of India showed that India's foreign exchange reserves in nominal terms (which includes valuation effects) rose by $16.6 billion during April-June 2023, mainly driven by strong Foreign Institutional Investment (FII) flows. However, foreign fund outflows likely to dampen sentiments. provisional data from the National Stock Exchange (NSE) showed foreign institutional investors (FII) sold shares worth Rs 3,364.22 crore on September 28. Some cautiousness may come as rating agency CRISIL said after clocking a robust 15.9 per cent growth in FY23, the bank credit growth in India is likely to moderate to 13-13.5 per cent in the current financial year (FY24). It will improve to 13.5-14 per cent in the next financial year (FY25) as economic growth picks up. Traders may be concerned with a private report that India's external debt rose modestly by 2.7 percent to $629 billion as of end June over the same period a year ago as NRI deposits picked up, with other major components almost remaining flat over the period. Traders continue to remain concerned as India's current account deficit (CAD) surged to $9.2 billion in the first quarter of 2023-24, more than seven times what it was in the preceding quarter.  Realty stocks will be in focus with a private report that home sales in the top seven cities of India reached an all-time high of 120,280 units between July and September. Sales this year were higher by 36 per cent, when compared to 88,230 units sold in the same period in 2022. There will be some reaction in sugar industry stocks with a private report that India is likely to ban sugar exports during the upcoming season, starting October 1. Online gaming industry stocks will be in limelight as Chairman Sanjay Kumar Agarwal said CBIC is ready to implement 28 percent GST on online gaming from October 1.

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

Nifty Top volumes

• JSW Steel has completed the acquisition by purchase of the entire 50% stake held by National Steel Holding in NSL Green Steel Recycling. 
• Reliance Industries' telecom arm -- Reliance Jio Infocomm has added 39.07 lakh customers in July 2023. 
• NTPC's wholly owned subsidiary -- NTPC Green Energy has inked MoU with Oil and Natural Gas Corporation. 
• Dr. Reddy's Laboratories has received approval for incorporation of a Wholly-owned Subsidiary of the Company.