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Indian markets halted the 7-day losing streak and ended higher on Friday after RBI hiked key policy rates on expected lines. Today, start of holiday shortened week is likely to be negative amid weak global cues and mixed economic data on domestic front. Markets will remain close on Wednesday on account of Dussehra. Traders will be concerned as the government data showed that the output of eight core infrastructure sectors grew 3.3 per cent in August -- the lowest in nine months -- as against 12.2 per cent in the year-ago period. The latest data on public debt showed that the total liabilities of the government increased to Rs 145.72 lakh crore at the end-June 2022 from Rs 139.58 lakh crore at end-March 2022. More pessimism may come as foreign investors turned sellers again in September and pulled out over Rs 7,600 crore from the Indian equity markets amid hawkish stance by the US Fed and sharp depreciation in rupee. Besides, the data released by the Controller General of Accounts (CGA) showed that the central government's fiscal deficit touched 32.6 per cent of the annual target in the current financial year till August as against 31.1 per cent recorded a year ago. However, some respite may come later in the day as Finance minister Nirmala Sitharaman said inflation is at a manageable level. She added that we are in an era of robust economic activities. Traders may be taking encouragement as the finance ministry said GST collections remained above Rs 1.40 lakh crore for the seventh month in a row at Rs 1.47 lakh crore in September, a 26 per cent increase over last year, reflecting buoyancy in tax collection and stability of the GST portal. Some optimism may come as data released by the Centre for Monitoring Indian Economy (CMIE) said India's unemployment rate dropped drastically to 6.43 per cent in September on the back of increase in labour participation in the rural and urban areas. Meanwhile, Union Transport Minister Nitin Gadkari said India is the fastest growing economy. He added that India can become a super economic power given its economic potential. There will be some buzz in Telecom industry stocks as after Prime Minister Narendra Modi launched the 5G services in India. Aviation industry stocks will be in limelight as the rates of aviation turbine fuel (ATF) were cut marginally by 4.5 per cent. Jet fuel price was cut by Rs 5,521.17, or 4.5 per cent, to Rs 115,520.27 pr kl in the national capital. There will be some reaction in oil & gas sector stocks as prices of natural gas, which is used to generate electricity, make fertiliser and is converted into CNG to run automobiles, were hiked by a steep 40% to record levels, in step with global firming up of energy rates. Auto industry stocks will be in focus as Federation of Automotive Dealers Associations said the hike in key interest rate by RBI is a big dampener for the automobile industry particularly for the price sensitive entry-level two-wheelers and passenger vehicles segments. Also, auto stocks will be reacting to their monthly sales numbers.

The US markets ended lower on Friday with historically hot inflation, rising interest rates and recession fears. Asian markets are trading mostly in red on Monday tracking sell-off on Wall Street.

Back home, snapping a 7-day losing streak, Indian equity benchmarks ended with strong gains on Friday, as investors cheered the RBI MPC announcement of the repo rate hike. Key gauges opened with minor cuts as traders were concerned as the RBI said India’s current account deficit (CAD) in April-June was at $23.9 billion, or 2.8 per cent of gross domestic product (GDP), much higher than the $13.4 billion, or 1.5 per cent of GDP, in January-March 2022. Besides, foreign institutional investors sold a net Rs 35.99 billion ($441.7 million) worth of equities on Thursday, as per provisional data available with the National Stock Exchange. However, key indices turned green and witnessed strong momentum in morning deals, after the Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) announced a 50 basis points (bps) hike in the repo rate to 5.90 per cent on Friday in order to bring elevated inflation back to its target. Sentiments remained up-beat with S&P Global Ratings’ statement that rising rates and increased European energy insecurity are hitting growth in almost every country, but India with an estimated 7.3 per cent growth this fiscal, would be the star among emerging market economies. Traders also found support with Union Minister Piyush Goyal’s statement that India will be the pillar of the global economic revival as it exhibited steady growth and emerged as the fastest-growing country among large economies of the world. Some optimism also came as Economic Affairs Secretary Ajay Seth said India’s economic recovery remains on course, supported by key structural reforms, despite exogenous shocks and challenges. Adding to the optimism, India climbed six notches to 40th position in the Global Innovation Index 2022 on account of improvement in several parameters. According to a report by the Geneva-based World Intellectual Property Organization (WIPO), Switzerland, the United States, Sweden, the United Kingdom and the Netherlands are the world's most-innovative economies. Traders also took a note of report that the Centre has reduced its borrowing target for the financial year 2022-23 (FY23) by Rs 10,000 crore to Rs 14.21 trillion amid robust tax collections. Finally, the BSE Sensex rose 1016.96 points or 1.80% to 57,426.92 and the CNX Nifty was up by 276.25 points or 1.64% to 17,094.35.

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