Indian equity benchmarks ended nearly a per cent lower on Wednesday, tracking a weak trend in global markets. Markets started off on pessimistic note, as traders were concerned as the fourth round of the Quarterly Employment Survey (QES) released by the Labour Ministry showed that employment generation in nine non-farm sectors slowed down in the March quarter of FY22, possibly under the impact of Omicron variant of Covid-19, with additional job creation dipping to 350,000 during the quarter, from 390,000 in the preceding December quarter of the financial year.  However, key gauges erased all the losses to trade flat in afternoon deals, as traders took some support with the income tax department's statement that the net direct tax collection has increased 23 per cent to Rs 7.04 lakh crore so far this fiscal. Some support also came as Economic affairs secretary Ajay Seth dismissed the concerns over depletion of forex reserve as overblown and said India has fairly large reserve to tide over the current situation. But, markets failed to hold recovery and fell sharply in late afternoon deals to end near day's low point as the Reserve Bank's rate-setting panel started its 3-day deliberations on Wednesday 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. Traders also remain concerned with continued foreign fund outflows. Foreign institutional investors (FIIs) have net sold shares worth Rs 2,823.96 crore on September 27, as per provisional data available on the NSE. Meanwhile, capital markets regulator SEBI came out with a new framework for daily price limit for commodity futures contracts in a bid to resolve the difference in closing price at domestic exchange and global bourse. Finally, the BSE Sensex fell 509.24 points or 0.89% to 56,598.28 and the CNX Nifty was down by 148.80 points or 0.87% to 16,858.60.

The US markets ended higher on Wednesday with Nasdaq settling over two percent amid the 10-year US Treasury yield ended the day at about 3.7% after earlier breaking above 4% for the first time since 2008. The rally on Markets reflected a positive reaction to the Bank of England's (BoE) plans to begin temporarily purchasing long-dated U.K. government bonds to address dysfunction in the gilt market. The BoE said the purchases would be carried out on whatever scale is necessary to restore orderly market conditions. The moves come as U.K. bond yields have spiked after the government revealed its mini-budget including significant unfunded tax cuts. Markets also benefited from a significant pullback by the US dollar, with the US dollar index tumbling by 1.2 percent. The greenback had recently reached new 20-year highs. On the sectoral front, gold stocks showed a substantial move to the upside on the day, resulting in a 7.0 percent spike by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid a sharp increase by the price of the precious metal, as gold for December delivery surged $33.80 to $1,670 an ounce. A significant increase by the price of crude oil also contributed to considerable strength among energy stocks, with the Philadelphia Oil Service Index and the NYSE Arca Oil Index soaring by 5.5 percent and 5.2 percent. Housing stocks also turned in a strong performance on the day, driving the Philadelphia Housing Sector Index up by 4.3 percent. Biotechnology, retail and networking stocks also showed notable moves to the upside, reflecting broad based strength on Wall Street.

Crude oil futures ended sharply higher on Wednesday after data showed a dip in US crude inventories in the week ended September 23. Data released by US Energy Information Administration (EIA) showed crude stocks dropped by 215,000 barrels last week. Gasoline inventories were down 2.4 million barrels last week, while distillate stockpiles fell 2.9 million barrels. Further, oil prices were also supported by production shut-ins in the Gulf of Mexico region due to Hurricane Ian. According to government data, about 190,000 barrels per day of oil production or 11% of the Gulf's total was shut in. Benchmark crude oil futures for November delivery rose $3.65 or about 4.7 percent at $82.15 a barrel on the New York Mercantile Exchange. Brent crude for November delivery gained $4.24 or about 3.5 percent to settle at $89.32 a barrel on London's Intercontinental Exchange.

Indian rupee tumbled against dollar on Wednesday, on account of sustained dollar demand from importers and banks. Significant foreign fund outflows, concerns about aggressive interest rate hikes by global central banks and potential global recession fears have impacted traders' sentiments. Foreign Institutional Investors (FIIs) were stood net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,823.96 crore, exchange data showed. Traders took note of private report that interest rate hikes in the United States and the resultant pressure on the rupee is likely to give the Reserve Bank of India (RBI) reason to deliver a 50-basis-point rate hike on Friday even as it tries to protect a recovery in growth. The RBI's monetary policy committee (MPC) has already hiked the key policy rate by 140 bps since May to 5.4%. On the global front, sterling languished near all-time lows on Wednesday on fears over Britain's radical tax cut plans. Finally, the rupee ended at 81.93 (Provisional), stronger by 40 paisa from its previous close of 81.53 on Tuesday.

The FIIs as per Wednesday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 6844.27 crore against gross selling of Rs 9884.21 crore, while in the debt segment, the gross purchase was of Rs 488.04 crore against gross selling of Rs 1402.86 crore. Besides, in the hybrid segment, the gross buying was of Rs 345.82 crore against gross selling of Rs 29.59 crore.

The US markets ended higher on Wednesday as traders reacted positively to the Bank of England's plans to begin temporarily purchasing long-dated U.K. government bonds to address dysfunction in the gilt market. Asian markets are trading in green on Thursday following the broadly positive cues from global markets overnight. Indian markets declined for the sixth straight session on Wednesday, its longest run of declines since June, as investor sentiment for risky assets remained weak amid mounting odds of a global recession. Today, the start of the F&O series expiry session is likely to be positive mirroring strong global cues. Traders will be taking encouragement as rating agency Icra retained its 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, even though on an annualised basis, the absolute numbers will be falling from Q1 (13.5 per cent) to a much lower level in Q2 and further down in the two remainder quarters due to the high base. Some support will come 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. Besides, India has proposed additional customs duties of 15 per cent on the import of 22 products, including whiskey, cheese and diesel engine parts, from the UK in retaliation to Britain's decision to impose restrictions on steel products. Meanwhile, capital markets regulator Sebi came out with guidelines pertaining to preferential issues and institutional placement of units by emerging investment vehicles -- REIT and InvIT. However, sustained selling by foreign portfolio investors likely to dampen sentiments in markets. Foreign institutional investors (FIIs) net offloaded shares worth Rs 2,772.49 crore on September 28, according to the data available on the NSE. There will be some buzz in the tea industry stocks as tea exports during the period January to July in the calendar year 2022 have touched 116.36 million kg as compared to 103.38 million kg in the same period of 2021. According to Tea Board data, exports to the largest importing block, the CIS countries, remained almost stagnant at 25.20 million kg as against 24.98 million kg in the first seven months of 2021. There will be some reaction in battery industry stocks with a private report stating that India's Li-ion battery demand will grow from the current stage of 3 GWh to 20 GWh by 2026 and 70 GWh by 2030. It added that this will need over $10 billion to boost cell manufacturing and raw material refining to serve the local demand.

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

Nifty Top volumes

• Power Grid Corporation of India has received investment approval for Transmission Project-Jam Nagar Oil Refinery of Reliance Industries to connect with Jam khambhaliya ISTS PS at an estimated cost of Rs 327.71 crore scheduled to be commissioned by September, 2023.  
• Tata Motors has launched the newest member of its EV family -- The Tiago.ev.
• L&T's construction arm -- L&T construction has secured order for its Buildings & Factories Business from State Govt of Assam to construct a new Medical College & Hospital at Golaghat, Assam on EPC Basis. 
• M&M has acquired 21,14,349 equity shares constituting 17.41% of the paid up equity share capital of Swaraj Engines from Kirloskar Industries.