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In a volatile session, Indian Benchmark indices erased most of the gains towards the end but still ended higher on Thursday, with investors eyeing quarterly updates from companies ahead of corporate earnings season. Benchmarks made positive start and added gains in morning deals with strong foreign flows. As per provisional data available on the NSE, foreign institutional investors (FIIs) remained net buyers to the tune of Rs 1,344.63 crore on October 4. Some support came in as the IMF said recent tightening actions by many central banks around the world will help to prevent high inflation from becoming entrenched. Sentiments remained optimistic amid a private report stating that the Department of Commerce is considering the formation of dedicated units called 'subject matter divisions' to build expertise in industries like services, agriculture, medicines, trade remedies, and digital trade as part of a more aggressive approach to free trade agreements. India wants to be able to negotiate agreements with other nations at the World Trade Organization from a position of strength.

However, key gauges pared most of their gains in late afternoon session, as some concern came with private survey showed that growth in India's services industry slumped in September to a six-month low, led by a substantial easing in demand amid high inflation. The S&P Global India services Purchasing Managers' Index fell to 54.3 in September from August's 57.2, much lower than the Reuters poll expectation for a gentle drop to 57.0. Despite staying above the 50-mark separating growth from contraction for the fourteenth straight month - the longest stretch of expansion since October 2016 - the index fell to its lowest since March. Some pessimism also came in as the World Trade Organization (WTO) slashed its global trade growth forecast for 2023, stating that elevated commodity prices and rising interest rates would curb import demand, and warned of a likely contraction if the conflict in Ukraine escalates.

On the global front, Asian markets ended mostly higher on Thursday as solid private payrolls and services sector data from the United States dampened hopes for a policy pivot from the U.S. Federal Reserve. European markets were trading lower despite renewed concerns about inflation and a possible recession. German factory orders decreased 2.4 percent month-on-month in August, Destatis reported - reversing a revised 1.9 percent rise in July. Economists had forecast a moderate 0.7 percent drop in August.

Back home, sugar industry stocks were in focus as the government said India's sugar exports rose 57 per cent to 109.8 lakh tonnes during 2021-22 marketing year ended September, resulting in foreign currency inflow worth about Rs 40,000 crore into the country. Aviation industry stocks also were in focus as recognising that an efficient and strong civil aviation sector is vital for the economic development of the country, the Department of Financial Services (DFS) has modified the Emergency Credit Line Guarantee Scheme (ECLGS) to enhance the maximum loan amount eligibility for airlines.

Finally, the BSE Sensex rose 156.63 points or 0.27% to 58,222.10 and the CNX Nifty was up by 57.50 points or 0.33% to 17,331.80.

The BSE Sensex touched high and low of 58,578.76 and 58,173.70, respectively. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.13%, while Small cap index was up by 1.30%.

The top gaining sectoral indices on the BSE were Metal up by 3.89%, Capital Goods up by 2.34%, Realty up by 2.15%, Industrials up by 1.96% and Power up by 1.61%, while FMCG down by 0.18% and Telecom down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.27%, Larsen & Toubro up by 2.24%, ICICI Bank up by 2.04%, HCL Technologies up by 1.98% and Infosys up by 1.76%. On the flip side, Bharti Airtel down by 2.53%, Hindustan Unilever down by 2.08%, Indusind Bank down by 1.52%, HDFC down by 1.41% and Bajaj Finance down by 1.18% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has said that recent tightening actions by many central banks around the world will help to prevent high inflation from becoming entrenched. It said the current coincidence of rising inflation and nominal wage growth has led to concerns that a wage-price spiral-in which both wages and prices accelerate for a prolonged period-could emerge.

It further said many economies have seen sharp rises in price inflation since 2021 as adverse supply shocks buffet the global economy and labour markets appear tight in the wake of the acute COVID-19 shock. These inflation rises have raised concerns among some observers that prices and wages could start feeding off each other and accelerate, leading to a wage-price spiral dynamic.

John Bluedorn, Deputy Division Chief on the World Economic Outlook in the IMF's Research Department, said if inflationary shocks start to come from the labour market itself- such as an unexpected, sharp uptick in wage indexation-that could moderate the effects of falling real wages, pushing up both wage growth and inflation for longer.

The CNX Nifty traded in a range of 17,428.80 and 17,315.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 4.94%, Coal India up by 4.73%, Hindalco up by 4.63%, Tata Steel up by 2.17% and Larsen & Toubro up by 2.06%. On the flip side, Bharti Airtel down by 2.56%, Hindustan Unilever down by 2.10%, HDFC down by 1.55%, Indusind Bank down by 1.33% and Divi's Laboratories down by 1.33% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 39.24 points or 0.56% to 7,013.38, France’s CAC decreased 33.84 points or 0.57% to 5,951.62 and Germany’s DAX decreased 53.50 points or 0.43% to 12,463.68.

Asian markets ended mostly higher on Thursday, despite Wall Street losses overnight. Meanwhile investors were awaiting US nonfarm payrolls report and inflation data that could provide additional clues on the pace of future interest rate hikes in the United States. Japanese shares advanced, led by gains in the energy stocks after OPEC+ agreed to cut 2 million barrels per day to shore up prices. Chinese markets remained shut for the Golden Week holiday.

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