Extending their losing streak for seventh straight session, Indian barometer gauges ended the F&O expiry session in red terrain ahead of Reserve Bank of India's (RBI) policy outcome amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Markets started the day on an optimistic note as traders took encouragement with report that rating agency ICRA retained its India's previous growth forecast of 7.2 per cent for the current fiscal, citing revival in contact-intensive services and a pick-up in government and private expenditure. It said growth is expected to pick up to pre-Covid levels on the back of pent-up demand. Some support also came with report that Goods and services tax (GST) collections in September are likely to be about Rs 1.45 trillion, and the monthly average mop-up in FY23 could be around Rs 1.55 trillion. However, initial rally get fizzled out and markets started losing gains as traders turning cautious on report that India's current account deficit (CAD) is expected to more than double sequentially to over $30 billion in the first quarter of financial year 2022-23 (Q1FY23) to rise above 3 per cent of gross domestic product (GDP) from $13.4 billion, or 1.5 per cent of GDP, in the previous quarter. Selling in second half of the trade mainly played spoil sports for local bourses and dragged them to end below neutral lines as market participants were largely remained on sidelines amid a private report stating that India's central bank is expected to increase its policy rate by half a point for the third time in a row as the currency's plunge to a record low this month complicates the battle against inflation. Finally, the BSE Sensex fell 188.32 points or 0.33% to 56,409.96 and the CNX Nifty was down by 40.50 points or 0.24% to 16,818.10.

The US markets ended deeply in red on Thursday, with the S&P 500 hitting a fresh low for the year and also reaching a new closing low, as traders cashed in on yesterday's gains, as the buying interest generated by the Bank of England's bond market intervention quickly evaporated. Cautiousness also prevailed in the markets as the Commerce Department released its third estimate of US economy activity in the second quarter, showing the decrease in gross domestic product was unrevised from the previous estimate. The report said real GDP fell by 0.6 percent in the second quarter, unchanged from the drop reported last month and in line with street estimates. The dip in GDP in the second quarter follows a 1.6 percent slump in the first quarter, with the two consecutive decreases signaling the US economy is in a technical recession. On the sectoral front, airline stocks turned in some of the market's worst performances on the day, resulting in a 4.4 percent nosedive by the NYSE Arca Airline Index. The index plummeted to a two-year closing low. Interest rate-sensitive utilities and commercial real estate stocks also saw substantial weakness, dragging the Dow Jones Utility Average and the Dow Jones U.S. Real Estate Index down by 4.1 percent and 3.1 percent, respectively. Significant weakness was also visible among semiconductor stocks, with the Philadelphia Semiconductor Index plunging by 3.3 percent to its lowest closing level in almost two years. Telecom, computer hardware and housing stocks also showed notable moves to the downside amid broad based weakness on Wall Street.

Crude oil futures ended lower on Thursday as the dollar eased off 20-year highs. Concerns about the outlook for energy demand contributed to the pullback by oil prices amid ongoing worries about a potential global recession. However, a private report stated that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are considering reducing output at a meeting next week helped limit the downside. Benchmark crude oil futures for November delivery fell $0.92 or about 1.1 percent at $81.23 a barrel on the New York Mercantile Exchange. Brent crude for November delivery dropped $0.83 or about 0.92 percent to settle at $88.49 a barrel on London's Intercontinental Exchange.

Indian rupee ended significantly higher against dollar on Thursday, on persistent selling of the American currency by exporters. Sentiments got a boost as rating agency Icra retained its India's previous growth forecast of 7.2 per cent for the current fiscal, citing revival in contact-intensive services and a pick-up in government and private expenditure. It said growth is expected to pick up to pre-Covid levels on the back of pent-up demand. Traders overlooked private report that India's current account deficit (CAD) is expected to more than double sequentially to over $30 billion in the first quarter of financial year 2022-23 (Q1FY23) to rise above 3 per cent of gross domestic product (GDP) from $13.4 billion, or 1.5 per cent of GDP, in the previous quarter. On the global front, Sterling fell on Thursday after British Prime Minister Liz Truss defended economic plans that have triggered chaos in the country's markets. Finally, the rupee ended at 81.73 (Provisional), stronger by 20 paisa from its previous close of 81.93 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 7709.16 crore against gross selling of Rs 9805.25 crore, while in the debt segment, the gross purchase was of Rs 1261.31 crore against gross selling of Rs 1636.85 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.33 crore against gross selling of Rs 16.22 crore.

The US markets ended lower on Thursday on worries that the US Federal Reserve's aggressive fight against inflation could hobble the US economy, and as investors fretted about a rout in global currency and debt markets. Asian markets are trading in red on Friday following weakness overnight on Wall Street. Indian markets fell for a seventh straight session on Thursday as the selloff in the global markets continued. Today, start of the session is likely to be negative as the Street eyes the Reserve Bank of India's (RBI) interest rate hike announcement later in the day coupled with lingering fears of a global recession. The central bank is likely to raise key repo rate by up to 50 basis points today as it struggles to tame record inflation. Traders will be concerned as the Reserve Bank of India (RBI) said India's current account deficit (CAD) in April-June was at $23.9 billion, or 2.8 per cent of gross domestic product (GDP), much higher than the $13.4 billion, or 1.5 per cent of GDP, in January-March 2022. Some pessimism will also come as another data released by RBI showed that India's external debt has risen by 7.1 per cent as it stood at $617.1 billion in June 2022, against $575.3 billion during the corresponding period of last year. Besides, foreign institutional investors sold a net Rs 35.99 billion ($441.7 million) worth of equities on Thursday, as per provisional data available with the National Stock Exchange. However, some respite may come later in the day as S&P Global Ratings said rising rates and increased European energy insecurity are hitting growth in almost every country, but India with an estimated 7.3 per cent growth this fiscal, would be the star among emerging market economies. Traders may be taking encouragement as Union Minister Piyush Goyal said India will be the pillar of the global economic revival as it exhibited steady growth and emerged as the fastest-growing country among large economies of the world. Besides, Economic Affairs Secretary Ajay Seth said India's economic recovery remains on course, supported by key structural reforms, despite exogenous shocks and challenges. Traders may take note of report that the Centre has reduced its borrowing target for the financial year 2022-23 (FY23) by Rs 10,000 crore to Rs 14.21 trillion amid robust tax collections. Meanwhile, capital markets regulator Sebi has allowed Foreign Portfolio Investors (FPIs) to participate in the exchange-traded commodity derivatives segment, a move that will further increase depth and liquidity in the market. Auto stocks will be in focus as the government deferred until October 2023 the implementation of norms mandating six airbags in all cars, giving the industry a one-year extension. Also, Moody's Investor Service said robust car sales during the ongoing festive season amid the easing of chip shortage will help the Indian automobile industry outshine its regional and global peers this year. There will be some reaction in gems and jewelry industry stocks as ICRA Ratings expects India's exports of cut and polished diamonds (CPDs) to taper by 8-10% to $22.0-22.5 billion in FY2023, amid the demand moderation.

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

Nifty Top volumes

• Tech Mahindra has unveiled Telco Smart Analytics Lab dedicated for google cloud in Milton Keynes, UK. 
• Axis Bank and Samsung have partnered to launch an exclusive co-branded credit card, powered by Visa. 
• NTPC has started commercial operation at first part capacity of 150 MW out of 300 MW Shambu ki Burj-2 Solar PV project at Bikaner, Rajasthan on September 29, 2022. 
• Bharti Airtel's subsidiary -- Airtel Payments Bank has started rolling out 1.5 lakh micro ATMS in a phased manner across tier 2 cities and semi-urban regions to facilitate cash withdrawal for its customers.