Snapping a two-day winning run, Indian equity benchmarks ended lower on Wednesday amid weakness across most sectors. Key gauges made negative start as traders were concerned as retail inflation for farm and rural workers increased to 6.94 per cent and 7.26 per cent, respectively, in August mainly due to higher prices of certain food items. In July, retail inflation for farm and rural workers stood at 6.60 per cent and 6.82 per cent respectively. Some concern also came as chief economic advisor V Anantha Nageswaran said Indian economy will grow at over 7 per cent, down from above 8 per cent of growth rate projected in January. He, however, said that the economic momentum and the animal spirits are unmistakable. Key gauges extended losses in afternoon deals after the Asian Development Bank (ADB) in an update of its flagship economic publication, Asian Development Outlook (ADO) has lowered its 2022 economic growth outlook for India, amid sluggish global demand and tightening of monetary policy to manage inflationary pressures from elevated prices for oil and other commodities. ADB forecasts growth of 7.0% for fiscal year (FY) 2022 (ending March 31, 2023). That compares with a projection of 7.5% in April. The growth outlook for 2023 is also revised down to 7.2% from 8.0%. Traders overlooked the chairman of National Bank for Financing Infrastructure and Development K V Kamath's statement that India is expected to be a $25-trillion economy in 25 years. He said the Indian economy is growing at a compound annual growth rate of 8-10 per cent. Meanwhile, foreign institutional investors (FIIs) have net bought shares worth Rs 1,196.19 crore on September 20, as per provisional data available on the NSE. Finally, the BSE Sensex fell 262.96 points or 0.44% to 59,456.78 and the CNX Nifty was down by 97.90 points or 0.55% to 17,718.35.

The US markets ended deeply in red on Wednesday after the Fed raised interest rates by another three-quarters of a percentage point and signaled further aggressive rate hikes for the remainder of the year. Citing its dual goals of maximum employment and inflation at a rate of 2 percent over the longer run, the Fed decided to raise its target range for the federal funds rate by 75 basis points to 3 to 3.25 percent. The move marks the third straight 75 basis point rate hike by the Fed and lifts rates to their highest level since early 2008. With inflation remaining elevated, the Fed also said it anticipates that ongoing interest rate increases will be appropriate. Economic projections provided along with the announcement suggest Fed officials expect to raise rates to 4.4 percent by the end of the year, well above the 3.4 percent forecast in June. Fed officials expect to increase rates to 4.6 percent by the end of 2023 before eventually scaling back rates in 2024 and 2025. On the sectoral front, Airline stocks moved sharply lower over the course of the session, resulting in a 3.4 percent nosedive by the NYSE Arca Airline Index. The index tumbled to a nearly two-month closing low. Substantial weakness was also visible among biotechnology stocks, as reflected by the 2.5 percent plunge by the NYSE Arca Biotechnology Index, which hit its lowest closing level in nearly three months. Banking stocks also came under pressure following the Fed announcement, dragging the KBW Bank Index down by 2.1 percent to a two-month closing low.

Crude oil futures ended lower on Wednesday on concerns about the outlook for energy demand after the Federal Reserve's announcement of a sharp hike in interest rates raised fears about a recession. The central bank raised its target range for the federal funds by 75 basis points to 3 to 3.25%, and signaled further sharp hikes in the coming months. Further, data from the US Energy Information Administration (EIA) showing higher inventories across the board also weighed on oil prices. The EIA data showed crude stockpiles in the US increased by 1.1 million barrels in the week ended September 16th. Benchmark crude oil futures for November delivery fell $1.00 or 1.2 percent at $82.94 a barrel on the New York Mercantile Exchange. Brent crude for November delivery dropped $0.54 or about 0.6 percent to settle at $90.08 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee concluded substantially weaker against dollar on Wednesday on increased demand for the greenback from importers and banks. Traders were cautious ahead of the US Federal Reserve's meeting outcome. Third 75-basis-point rate hike by the Federal Open Market Committee is widely expected. Sentiments were also fragile as Asian Development Bank (ADB) has slashed India's economic growth projection for 2022-23 to 7 per cent from 7.2 per cent earlier, citing higher than expected inflation and monetary tightening. On the global front, dollar jumped to a new two-decade high on Wednesday, as comments from Russia's President Vladimir Putin rattled markets ahead of another likely aggressive rate hike from the U.S. Federal Reserve. Finally, the rupee ended at 79.96 (Provisional), weaker by 22 paisa from its previous close of 79.74 on Tuesday.

The FIIs as per Wednesday's data were net buyers in equity segment and net sellers in debt segment. In equity segment, the gross buying was of Rs 8615.03 crore against gross selling of Rs 6810.98 crore, while in the debt segment, the gross purchase was of Rs 96.94 crore against gross selling of Rs 344.73 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.30 crore against gross selling of Rs 4.05 crore.

The US markets ended lower on Wednesday as investors digested another supersized Fed rate hike and its commitment to keep up increases into 2023 to fight inflation. Asian markets are trading in red on Thursday tracking losses on Wall Street overnight. Indian markets halted a two-day winning run and ended lower on Wednesday, amid nervousness across global markets. Today, bears are likely to continue dominate markets with gap-down opening mirroring a global sell-off. Foreign fund outflows likely to dent sentiments in markets. Foreign institutional investors (FIIs) have net sold shares worth Rs 461.04 crore on September 21, as per provisional data available on the NSE. However, some respite may come as global rating agency S&P said even though the US and the Euro zone are headed to recession, India is unlikely to face the impact given the not so coupled nature of its economy with the global economy. Paul F Gruenwald, S&P global chief economist and managing director said Indian economy is a lot decoupled from the global economy than we normally think of, given its large domestic demand, even though you (India) are a net importer of energy. But you have enough forex reserves on one hand and your companies have managed to maintain healthy balance sheets. Some support may come as rating agency Crisil said reflecting further improvement in asset quality of banks, their gross non-performing assets (GNPAs) are expected to decline to 5.0 per cent by March 2023. Meanwhile, the Securities and Exchange Board of India (Sebi) is working on a new payment system for the secondary market, which could prevent brokers from accessing their client funds. It will be on the lines of the Application Supported by Blocked Amount (ASBA) process used for subscribing to initial public offerings (IPOs), where funds move out of an investor's bank account only after the trade is confirmed. There will be some buzz in logistics industry stocks as the Union Cabinet approved the National Logistics Policy (NLP) that aims to enable seamless movement of goods across the country as well as improve the competitiveness of Indian goods in the domestic and export markets. Agriculture industry stocks will be in focus as the first advance estimate of agriculture production for the 2022-23 crop year (July-June) showed that production of rice in the ongoing kharif season is expected to be almost 6.05 per cent less than the same period last year at 104.99 million tonnes. There will be some reaction in solar power industry stocks as the Union Cabinet approved the Rs 19,500-crore proposal of the Ministry of New and Renewable Energy (MNRE) for the second tranche of the production-linked incentive (PLI) scheme for solar equipment manufacturing.

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

Nifty Top volumes

• Tata Steel has raised Rs 2000 crore by allotment of 20,000 - Fixed rate, Unsecured, Redeemable, Rated, Listed, NCDs having face value Rs 10 lakh each, for cash to identified investors on private placement basis.  
• M&M has proposed to acquire 21,14,349 Equity shares constituting 17.41% of the paid up equity share capital of Swaraj Engines from Kirloskar Industries at a price of Rs 1,400 per share aggregating to around amount of Rs 296 crore. 
• Indian Oil Corporation has tied up with electric vehicle charging infrastructure startup eVolt India for the installation of over 75 charging stations in Punjab, Haryana and Uttar Pradesh.
• Tech Mahindra has launched its end-to-end ESG (Environment, Social, Governance) portfolio to help businesses achieve their sustainability goals.