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Indian markets ended lower on Thursday after the US Federal Reserve's tighter policy through 2024 spooked investors. Today, domestic indices are likely to get yet another negative start tracking mixed cues from global markets. Besides, escalating diplomatic tensions between India and Canada likely to dampen sentiments. India temporarily suspended visa operations with Canada for an indefinite period due to alleged ‘security threats’ against diplomatic staff, amidst a diplomatic crisis that arose following the latter’s allegation that India is responsible for the killing of a Sikh activist. Persistent selling by FIIs likely to impact domestic markets. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 3,007.36 crore on September 21. However, some support may come later in the day as Reserve Bank of India data showed that getting a boost from the festive period, bank credit expanded by 15.07 per cent year-on-year as of September 8, 2023. Traders may take note of report that the Securities and Exchange Board of India (Sebi) relaxed the framework mandating large corporates (LCs) to access the corporate bond market for debt-raising on Thursday. Meanwhile, as a measure to prevent erroneous order placement, the Exchange has notified that Stop Loss orders with Market condition (SL-M) in Equity segment, Equity Derivatives segment, Currency Derivatives segment and Commodity Derivatives segment shall be discontinued with effect from October 9, 2023. Banking stocks will be in focus as Reserve Bank of India (RBI) Deputy Governor Michael Patra said India’s bank credit remains resilient and is showing no signs of systematic risk. There will be some reaction in edible oil industry stocks amid a private report that India's soybean production is expected to drop as patchy monsoon rains in August stunted the crop in some key growing areas. Sugar industry stocks will be in limelight amid a private report that India is unlikely to export sugar in 2023-24 season as output will be less than a year earlier. Moreover, Samhi Hotels and Zaggle Prepaid Ocean Services will debut on the bourses today. The issue price for Samhi Hotelsis fixed at Rs 126, while that of Zaggle has been fixed at Rs 164.

The US markets ended lower on Thursday as investors reacted to a signal from the Federal Reserve that it intended to keep interest rates higher for longer. Asian markets are trading mixed on Friday ahead of the Bank of Japan's policy announcement.

Back home, Thursday turned out to be yet another lackluster day for the Dalal Street, as bears held a tight grip amid renewed concerns about the outlook for interest rates after the US Fed signaled on keeping interest rates at an elevated level through 2024 after one more rate hike this year, despite the decision to hold interest rates steady this month. After a gap down opening, markets remained under selling pressure, as the Asian Development Bank (ADB) marginally lowered India's growth forecast to 6.3 per cent for the current financial year from its earlier projection of 6.4 per cent on account of slowing exports and the likely impact of erratic rainfall on agriculture output. Foreign fund outflows also dented investors’ sentiments. The provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 3,110.69 crore on September 20. Domestic sentiments were downbeat, as the Reserve Bank of India (RBI) recently released data on household financial savings which created a stir in the markets. The data showed that household financial savings were at 5.1 percent of GDP, almost a 40-year low.  Weak trade continued in the markets till the end of the trading session, as investors got cautious after the All-India Consumer Price Index Number for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) for the month of August, 2023 increased by 9 points and 8 points respectively to stand at 1224 and 1234 points respectively. Adding more worries, another private report stated that with crude oil hovering near $94 a barrel, India, the world’s third biggest importer, is confronted with the return of a long-feared spectre: the twin deficit challenge. Finally, the BSE Sensex fell 570.60 points or 0.85% to 66,230.24 and the CNX Nifty down by 159.05 points or 0.80% to 19,742.35.

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