A heavy selling dragged Indian equity markets in red on Monday, with both Sensex and Nifty closing lower by over 1%. After a weak start, markets remained negative for the entire day, as weak economic data dampened the sentiments in the markets. The government data showed that the output of eight core infrastructure sectors grew 3.3 per cent in August -- the lowest in nine months -- as against 12.2 per cent in the year-ago period. More pessimism came as foreign investors turned sellers again in September and pulled out over Rs 7,600 crore from the Indian equity markets amid hawkish stance by the US Fed and sharp depreciation in rupee. However, some recovery witnessed over the Dalal Street in late morning deals, as the gross Goods and Services Tax (GST) collections surged 26% in the month of September 2022 at Rs 1,47,686 crore over the same month last year. Out of total, CGST is Rs 25,271 crore, SGST is Rs 31,813 crore, IGST is Rs 80,464 crore (including Rs 41,215 crore collected on import of goods) and Cess is Rs 10,137 crore (including Rs 856 crore collected on import of goods).  Besides, the Finance Ministry will run a special financial inclusion drive from October 15 to achieve saturation in respect of bank accounts and expansion of Kisan Credit Card coverage, among others. Indices failed to hold recovery & witnessed a sharp fall in the last hours of trade. Sentiments were pessimistic, after India's manufacturing activity lost some momentum in September, but cost pressures continued to recede. According to the S&P Global's Purchasing Managers' Index, the S&P Global India Manufacturing PMI edged down to 55.1 from 56.2 in August. Besides, the latest data on public debt showed that the total liabilities of the government increased to Rs 145.72 lakh crore at the end-June 2022 from Rs 139.58 lakh crore at end-March 2022. Traders overlooked a report by the Reserve Bank of India (RBI) stating that the retail inflation may come down to 5.2% in the next fiscal beginning April 2023. Finally, the BSE Sensex declined 638.11 points or 1.11% to 56,788.81 and the CNX Nifty was down by 207.00 points or 1.21% to 16,887.35.

The US markets ended sharply higher on Monday as Treasury yields eased from levels not seen in roughly a decade. The yield on the 10-year US Treasury note rolled over to trade at around 3.65%, after topping 4% at one point last week. The surge was also due largely to hectic bargain hunting after recent sharp losses. Data showing the pace of US manufacturing activity to have grown at its slowest pace in 30 months helped ease concerns about aggressive tightening by the Fed. A report from the Institute for Supply Management (ISM) showed activity in the US manufacturing sector slowed by more than expected in the month of September but still saw continued growth. The ISM said its manufacturing PMI fell to 50.9 in September from 52.8 in August, although a reading above 50 still indicates growth in the sector. Street had expected the index to edge down to 52.2. With the bigger than expected decrease, the manufacturing PMI dropped to its lowest level since hitting 43.5 in May 2020. A report released by the Commerce Department showed construction spending in the U.S. fell by 0.7 percent to an annual rate of $1.781 trillion in August after sliding by 0.6 percent to a revised rate of $1.794 trillion in July. Street had expected construction spending to dip by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month. The bigger than expected decrease in total construction spending came as spending on private construction decline by 0.6 percent to an annual rate of $1.426 trillion. In the stock specific development, Tesla plunged more than 8 percent after the company's vehicle deliveries fell short of estimates. Tesla delivered a record 343,830 cars worldwide in the third quarter. However, Street had expected the company to ship nearly 358,000 vehicles in the quarter.

Crude oil futures ended higher with rally over five percent on Monday on speculation the Organization of the Petroleum Exporting Countries and its allies, together known as OPEC+ will discuss cutting crude output at their upcoming meeting on Wednesday. According to private reports, the OPEC+ may consider cutting output by more than 1 million barrels a day for its biggest reduction since the pandemic, to support falling prices. Further, the dollar index fell for a fourth consecutive day on Monday after touching its highest level in two decades. A cheaper dollar could bolster oil demand and support prices. Benchmark crude oil futures for November delivery rose $4.14 or 5.2 percent at $83.63 a barrel on the New York Mercantile Exchange. Brent crude for December delivery surged $3.72 or about 4.37 percent to settle at $88.86 a barrel on London's Intercontinental Exchange.

Indian rupee ended considerably lower against the US dollar on Monday, on increased demand for the greenback from importers and banks. Heavy selling pressure in the domestic equities and spike in crude oil prices weighed on the local unit. Sentiments were fragile as India's factory growth dipped to a three-month low in September due to a moderation in demand and output, despite easing inflationary pressures and strong business confidence. According to the S&P Global's Purchasing Managers' Index, the S&P Global India Manufacturing PMI edged down to 55.1 from 56.2 in August. Traders also remained concerned as the government data showed that the output of eight core infrastructure sectors grew 3.3 per cent in August -- the lowest in nine months -- as against 12.2 per cent in the year-ago period. On the global front, sterling rose on Monday after Britain reversed a plan to cut the highest rate of income tax while the yen weakened past 145 per dollar. Finally, the rupee ended at 81.82 (Provisional), weaker by 42 paisa from its previous close of 81.40 on Friday.

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 9443.06 crore against gross selling of Rs 10965.54 crore, while in the debt segment, the gross purchase was of Rs 985.13 crore against gross selling of Rs 3515.67 crore. Besides, in the hybrid segment, the gross buying was of Rs 20.76 crore against gross selling of Rs 62.19 crore.

The US markets ended higher on Monday as US Treasury yields tumbled on weaker-than-expected manufacturing data, increasing the appeal of stocks at the start of the year's final quarter. Asian markets are trading in green on Tuesday after stocks on Wall Street rallied overnight. Indian markets ended sharply lower on Monday tracking weak global cues as investors fretted about the impact of high inflation and aggressive policy tightening on global growth. Today, start of session is likely to be optimistic tracking firm global cues. Traders will be taking encouragement as Crisil Ratings said that India Inc's credit quality showed further improvement in April-September period with the ratio of upgrades to downgrades inching higher. Crisil Ratings, which rates 6,800 companies, added that the credit ratio's improvement to 5.52 in H1FY23 as compared to 5.04 in H2FY22 was driven by leaner balance sheets led by healthy cash flows and muted investments. Also, Icra Ratings said credit quality of corporates has strengthened further in the first half of the current fiscal with rating upgrades being more than three times that of downgrades, carrying on with the momentum since early FY22. However, some cautiousness may come as the United Nations Conference on Trade and Development (UNCTAD) said India's economic growth is expected to decline to 5.7 per cent this year from 8.2 per cent in 2021, citing higher financing cost and weaker public expenditures. According to the forecast by the UNCTAD Trade and Development Report 2022, India's GDP will further decelerate to 4.7 per cent growth in 2023. Traders may be concerned as the preliminary data released by the commerce ministry showed that India's exports contracted by 3.52% to $32.62 billion in September against $33.81 billion in the same month last year, while the trade deficit widened to $26.72 billion. Besides, the average cost of market borrowing for states rose 12 basis point to 7.77 per cent on Monday, increasing for the third consecutive week. Meanwhile, capital markets regulator Sebi has cautioned investors against unauthorised money mobilisation by entities claiming to provide portfolio management services. Further, the regulator noted that these entities have been luring the public, with a promise of high returns, through pamphlets and social media platforms. There will be some buzz in platinum related industries stocks as the Finance Ministry said import duty on platinum has been increased to a total of 15.4 per cent with effect from October 03, 2022. Sugar industry stocks will be in focus with a private report that the government will likely cut the sugar export quota by 29% for the new marketing year that started on October 1 to keep domestic supplies steady. There will be some reaction in fertilizer stocks as with fall in global prices, fertiliser companies are looking to import phosphoric acid at not more than $1,000-1,050 per tonne -- around 40 per cent cheaper than the price quoted by global suppliers in the September quarter. In the primary market, the Rs 500-crore IPO of consumer durables player Electronics Mart India will open for subscription today and close on October 07. The price band for the issue has been fixed at Rs 56-59 per share.

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

Nifty Top volumes

• Tata Motors has reported total domestic sales increased by 44% to 80,633 units in September 2022. 
• Adani Ports and Special Economic Zone has recorded 13% YoY growth in cargo volumes in September 2022, to reach 26.1 MMT. 
• Bharti Airtel is launching 5G telecom services in eight cities, including four metros, and will progressively cover the entire country by March 2024.
• Maruti Suzuki India has sold a total of 176,306 units in September 2022.