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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.

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.

Back home, 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.

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