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Indian markets closed a volatile session lower on Tuesday, resuming their losing streak after a day’s break on weak global cues as investors remained cautious ahead of the Bank of England and Federal Reserve meetings. Today, markets are likely to make cautious start on Wednesday ahead of long weekend holiday on account of Diwali amid mixed global cues and the ongoing earnings season. Investors will be eyeing the Services PMI data to be out later in the day. Traders will be taking encouragement as Niti Aayog Vice-Chairman Rajiv Kumar said Indian economy is expected to grow by 10 per cent or more in the current fiscal, and 8 per cent plus in the next fiscal year. Kumar further said that seven years of the Modi government has laid a strong economic foundation for businesses to thrive in India. Sentiments will get boost as Minister of State for Electronics and IT Rajeev Chandrasekhar said India has an unprecedented opportunity to grow electronics manufacturing to $300 billion in the next 3-4 years, building on scale, competitiveness, large market and enabling policies. Some support will come with a private report stating that hiring activity expanded by 43 per cent year-on-year in October driven by strong demand for technology professionals. According to the report, with 2,523 job listings in October 2021, there was a 43 per cent year-on-year (Y-O-Y) growth. However, there may be some cautiousness with a report that foreign institutional investors (FIIs) have offloaded Rs 5,476 crore worth of shares in November already. This comes on the heels of net sales of Rs 13,550 crore last month-the highest single month net sales since March 2020. There will be some reaction in banking stocks as the RBI issued a revised Prompt Corrective Action (PCA) framework for banks to enable supervisory intervention at appropriate time and also act as a tool for effective market discipline. It said capital, asset quality and leverage will be the key areas for monitoring in the revised framework. Auto stocks will be in focus as automobile dealers' body FADA termed the current festive season as the worst in terms of business in a decade for its retail partners across the country. The industry body said the chip shortage situation has impacted offtake in the passenger vehicle segment. Meanwhile, IPOs of Policybazaar, SJS Enterprises, and Sigachi Industries will close for subscription today. While the issue of SJS Enterprises is yet to fully subscribed, that of Policybazaar has been bid for 1.59 times by investors with retail investors and Qualified Institutional Buyers (QIB) oversubscribing their quota. Sigachi Industries’ public issue has been subscribed 23.12 times with NIIs and retail investors heavily oversubscribing the issue.

The US markets ended higher on Tuesday as a strong earnings season continued to lift sentiment for equities. Asian markets are trading mostly in red on Wednesday as investors look ahead to the conclusion of a key Federal Reserve meeting later in the day.

Back home, Indian equity benchmarks moved between gains and losses on Tuesday before ending the day in red, on account of selling pressure in heavyweights like Tata Steel, Tech Mahindra, HCL Technologies and Reliance Industries. Domestic markets started trade in the green, as traders took some support with provisional data released by the government showed that India’s merchandise exports in October rose 42.33 per cent to $35.47 billion. The exports stood at $24.92 billion in October 2020 and $26.23 billion in October 2019. Some support also came with SBI Research’s report stating that the digitisation drive and pandemic-induced emergence of the gig economy have led to a faster formalisation of the economy, with the share of the informal sector shrinking to just 15-20 per cent in 2021 from 52.4 per cent in 2018. Adding to the optimism, Goods and Services Tax (GST) collection remained above Rs 1 lakh crore for the fourth month in a row at over Rs 1.30 lakh crore in October, indicating the impact of festive buying. This is the second highest collection of GST since its implementation on July 1, 2017. However, markets lost momentum along the way and slipped into red in late afternoon session, as traders turned anxious with Centre for Monitoring of Indian Economy (CMIE) data showing that despite a 124 basis points month-on-month decline in urban joblessness rate, the country’s overall unemployment rate rose again in October, owing to a sudden 175 basis points rise in rural joblessness rate. Some concern also came amid reports that for the first time this fiscal, the weighted average cost of states' market borrowings crossed the 7 percentage mark at the auctions held on Monday with the average cut-off jumping by 12 bps to 7.02 per cent. Finally, the BSE Sensex fell 109.40 points or 0.18% to 60,029.06 and the CNX Nifty was down by 40.70 points or 0.23% to 17,888.95.