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Indian markets ended flat with negative bias on Tuesday as traders avoided taking any long position ahead of monthly F&O expiry later in the week and amid higher US bond yields. Today, start of the session is likely to be negative tracking weakness in global markets. Persistent foreign fund outflows likely to dent market sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 693.47 crore on September 26. As per a private report, FIIs have sold about $1.6 billion in Indian equities in September, the most since January 2023. The report added this trend was driven by elevated valuations in the domestic market and negative global cues. However, some support may come as the Centre extended the tenure of the export-boosting scheme Remission of Duties and Taxes on Exported Products (RoDTEP) for nine more months, amid faltering exports and tepid external demand. Traders may take note of report that the central government has decided to stick to its market borrowing plan of Rs 6.55 trillion in the second half (October-March) of financial year 2023-24 (H2FY24), brushing aside pressure from tepid revenue growth and rising subsidy burden in the pre-election year. This will include the issuance of sovereign green bonds worth Rs 20,000 crore, as against the Rs 16,000 crore maiden green bonds issued in FY23. Meanwhile, Union Minister of Health and Family Welfare Mansukh Mandaviya has launched the Rs 5,000 crore Promotion of Research and Innovation in Pharma and MedTech sector (PRIP) scheme, which aims to transform India’s pharma medtech industry from a cost-based one to innovation-based. Shares of online gaming are likely to remain in focus amid reports that the tax demand from these firms could top Rs 1 lakh crore.  There will be some reaction in diamonds industry related stocks as rating agency Icra said India's export of cut and polished diamonds is projected to decline by 22 per cent to $17.2 billion in the current fiscal due to weakened demand from the key consuming nations. Signature Global and Sai Silks (Kalamandir) shares may list on the exchanges on September 27.

The US markets ended lower on Tuesday as bond yields continue to hover near 16-year highs, and fears of Federal government shutdown resurfaced. Asian markets are trading mixed on Wednesday after data showed China's industrial profits surged 17.2 percent from a year earlier in August.

Back home, Indian equity benchmarks ended flat with a negative bias on Tuesday as investors exercised caution in the wake of weak global cues. Markets made a cautious start and remained in a narrow band throughout the day as the provisional data available on the NSE showed that foreign institutional investors (FII) offloaded shares worth net Rs 2,333.03 crore on September 25, 2023. Cautiousness ahead of the monthly F&O expiry this week also kept underlying sentiment cautious. However, losses remained capped as traders took support with S&P Global Market Intelligence stating that Indian banks will continue attracting global investment from investors looking for better returns as credit growth, improved margins and stable asset quality boost the country’s lenders. Some support also came with the Global Trade Research Initiative’s (GTRI) statement that steps like streamlining port and customs operations, and setting up of national trade network will help Indian firms integrate with global value chains and add $1.2 trillion in the country’s foreign trade by 2030. Meanwhile, the market regulator has extended the short-term additional surveillance measure (ASM) and trade-for-trade settlement framework to small and medium enterprises (SME) stocks. This revised framework will be made available by October 3. Finally, the BSE Sensex fell 78.22 points or 0.12% to 65,945.47 and the CNX Nifty down by 9.85 points or 0.05% to 19,664.70.

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