Indian equity benchmarks extended their losing run to the 4th straight session and ended with heavy losses on Monday, tracking a risk-off mood among investors leading to unrelenting pressure on global stocks as worries of elevated inflation and global recession continued to rise.  Key gauges made gap-down opening and remained under selling pressure throughout the day, amid foreign fund outflows. Foreign institutional investors offloaded shares worth a net Rs 2,899.68 crore on Friday, according to data available with BSE. Traders were concerned as infusing more than Rs 51,000 crore last month, foreign investors have slowed down the pace of equity buying in India in September so far, as they invested a little over Rs 8,600 crore, on sharp depreciation in rupee. Some concern also came as S&P Global Ratings projected India's economic growth at 7.3 percent in the current fiscal with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022. Sentiments also remain dampened on report that the Reserve Bank of India is set to raise interest rates again this week on September 30 with a slim majority expecting a half-point hike and some others expecting a smaller 35 basis point rise. The RBI has lagged many of its global peers, despite inflation sticking above the top end of its target range of 2-6 percent all year. Traders also took a note of the Asian Development Bank's (ADB) report stating that with economic activity still to reach pre-pandemic levels, the RBI may slow down the pace of rate hikes until next year to quell soaring inflation while supporting growth. Traders overlooked the commerce and industry ministry's statement that the country is on track to attract $100 billion foreign direct investment (FDI) in the current fiscal on account of economic reforms and ease of doing business in recent years. Finally, the BSE Sensex fell 953.70 points or 1.64% to 57,145.22 and the CNX Nifty was down by 311.05 points or 1.80% to 17,016.30.

The US markets ended in red on Monday. A continued surge in the value of the US dollar contributed to the weakness on Markets, with the greenback hitting a record high versus the British pound. Aggressive interest rate hikes by the Federal Reserve continue to contribute to the increase by the dollar along with Britain's new chancellor Kwasi Kwarteng's announcement of a sweeping package of tax cuts. The British pound dropped to a record low against the US dollar on Monday, falling 4% at one point to an all-time low of $1.0382. The pound has since come off its worst levels on speculation that the Bank of England may have to raise rates more aggressively to tamp down inflation. The Fed and other central banks have indicated they plan to continue raising rates in an effort to combat stubbornly elevated inflation. On the sectoral front, Airline stocks extended their recent sell-off amid concerns about the outlook for demand, resulting in a 4.5 percent nosedive by the NYSE Arca Airline Index. The index plummeted to a two-year closing low. Substantial weakness was also visible among natural gas stocks, which saw further downside despite an increase by the price of the commodity. The NYSE Arca Natural Gas Index plunged by 3.2 percent to its lowest closing level in well over two months. Interest rate-sensitive housing, commercial real estate and utilities stocks also saw considerable weakness due to worries out the impact of higher rates.

Crude oil futures ended deeply in red on Monday on rising concerns about the outlook for fuel demand due to increasing possibility of a global recession. Further, the dollar's continued strength weighed significantly on oil prices. The dollar index surged to a fresh two-decade high today, climbing to 114.53. Besides, last week's announcement of the biggest package of unfunded tax cuts by British Chancellor of the Exchequer Kwasi Kwarteng has raised fears about the stability of U.K. government finances. The Pound Sterling tanked against the U.S. dollar, falling to a record low of $1.0382. Benchmark crude oil futures for November delivery fell $2.03 or about 2.6 percent at $76.71 a barrel on the New York Mercantile Exchange. Brent crude for November delivery declined $2.05 or about 2.41 percent to settle at $82.98 (Provisional) a barrel on London's Intercontinental Exchange.

Continuing previous session drubbing, Indian rupee closed at all-time low against dollar on Monday on account of continued dollar demand from importers and banks. Escalation of geopolitical risks due to conflict in Ukraine, a negative trend in domestic equities and significant foreign fund outflows weighed investor's sentiments. This is the fourth straight session when the rupee is ended lower against greenback. Traders ignored Finance Minister Nirmala Sitharaman's statement that the rupee has held back very well when compared to other currencies against the US Dollar. She added that the Reserve Bank and the Finance Ministry are keeping a very close watch over the developments. On the global front, Sterling crashed to a record low early on Monday as traders rushed for the exits on mounting concern that the new government's economic plan will stretch Britain's finances to the limit. Finally, the rupee ended at 81.67 (Provisional), weaker by 58 paisa from its previous close of 81.09 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 6283.47 crore against gross selling of Rs 8883.51 crore, while in the debt segment, the gross purchase was of Rs 234.56 crore against gross selling of Rs 472.82 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.73 crore against gross selling of Rs 10.61 crore.

The US markets ended lower on Monday as investors fretted that the Federal Reserve's aggressive campaign against inflation could throw the US economy into a sharp downturn. Asian markets are trading mostly in red on Tuesday following broadly negative cues from global markets overnight. Indian markets fell for a fourth consecutive session on Monday as investors fretted about faster inflation, aggressive central bank action and a possible global recession. Today, markets are likely to open in green even as global markets remained lower on economic growth concerns. Investors will be tracking movements on the rupee, oil prices and foreign inflows. The rupee closed at a record low of 81.63 versus the dollar on Monday. Sentiments will get a boost as Chief Economic Advisor (CEA) V Anantha Nageswaran said the Indian economy is showing resilience and on the path to recovery. Private demand and the services sector are doing better than expected. He also said all sectors of the economy such as agriculture, manufacturing and construction are doing well. Traders may take note of report that economic grouping OECD in a report retained the GDP growth projections for India at 6.9 per cent for the current financial year despite the global economy losing momentum in wake of the Russia-Ukraine war. However, traders may be some cautiousness as Finance minister Nirmala Sitharaman said some people do also speak that a falling rupee also helps exports. Whether it does or doesn't, theoretically it may, but in today's condition, with recession outside and demand not really as adequately as it should be, even a fall in the rupee may or may not help our exports. We are conscious about these basic facts. Besides, foreign institutional investors (FIIs) have net sold shares worth Rs 5,101.30 crore on September 26, as per provisional data available on the NSE. Meanwhile, days ahead of unveiling the much-awaited new foreign trade policy (FTP) document, the Centre has announced extension of the existing policy by another six months due to global headwinds. There will be some reaction in ITeS sector stocks as crisil said that the information technology-enabled services (ITeS) sector is set to sustain its growth momentum in the current fiscal year (FY23) - a good augury for small and medium enterprises (SMEs), which account for 20-40 per cent of the sector's revenue.

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

Nifty Top volumes

• BPCL has signed an agreement with Brazilian national oil company Petrobras for sourcing crude oil from the Latin American nation as part of plans to diversify its sourcing needs.
• HDFC and ERGO International AG's joint venture -- HDFC ERGO General Insurance Company has joined hands with HDFC Life to offer Click2Protect Optima Secure.
• Maruti Suzuki India has started retail sales of its newest flagship offering from NEXA, the Grand Vitara. 
• Bharti Airtel has launched Xsafe, an easy-to-operate, end-to-end home surveillance solution.