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Indian markets ended lower for the second consecutive session on Wednesday amid selling in heavyweights and across the sectors, barring power stocks. Today, markets likely to start session in red terrain amid global sell-off after the U.S. Federal Reserve held interest rates steady but stiffened its hawkish stance, with a further rate increase projected by the end of the year and monetary policy kept significantly tighter through 2024 than previously expected. Foreign fund outflows likely to dent domestic sentiments. 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. There will be some cautiousness as the latest payroll data from the Employees' Provident Fund Organisation (EPFO) indicates a slight dip in the creation of new formal jobs in July, signalling stagnation in the labour market. New monthly subscribers to the employees' provident fund (EPF) declined by 1.2 per cent to 1.02 million in July, compared to 1.03 million in June. However, some support may come later in the day as India Ratings and Research upwardly revised its FY24 real GDP growth estimate to 6.2 per cent from the 5.9 per cent expected earlier. The domestic ratings agency attributed its revision to a variety of factors, including the government's capital expenditure, deleveraged balance sheets of India Inc and banks, subdued global commodity prices and the prospect of private capital expenditure picking up. Sugar stocks will be in focus as the India Sugar Mills Association (ISMA) said there will be no scarcity in supply of sugar in the next season (October-September), thanks to an adequate buffer and an increase in production prospects in Uttar Pradesh, Maharashtra and Karnataka. There will be some reaction in stocks related to space sector as Finance Minister Nirmala Sitharaman said that the Indian Space Research Organisation (ISRO) through the success of Chandrayaan 3 has achieved innovation along with sustainability and the space sector is backed by reforms which should attract more funds as the government aims to institutionalise the private sector via its policy. Meanwhile, EMS, an infrastructure player that provides sewerage solutions, is likely to see a strong listing on September 21.

The US markets ended lower on Wednesday after the US Federal Reserve held key interest rates unchanged. Asian markets are trading in red on Thursday following overnight losses on Wall Street.

Back home, Indian equity benchmarks continued their downward slide on Wednesday and ended with losses of over a percent, in tandem with weak trends in global markets ahead of the US Federal Reserve's interest rate decision. Weak trend in index majors HDFC Bank, JSW Steel and Reliance Industries also added to the overall bearish trend. Markets made a gap-down opening and stayed in red for whole day as traders were concerned after the equity foreign direct investment (FDI) into India declined sharply to $13.9 billion in April-July 2023 from $22.04 billion a year ago, showing the effect of the slowdown in global economic activity. Some cautiousness also crept in with exchange data showing that foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,236.51 crore on Monday. Markets extended fall in late afternoon deals, as traders were cautious after the Reserve Bank of India (RBI) in its monthly bulletin said that a shift by state governments to the Old Pension Scheme (OPS) will be fiscally unsustainable and a major step backwards. Traders also took a note of the Global Trade Research Initiative’s (GTRI) report stating that banking issues like reluctance to process forex received through alternate channels and high processing fees are hindering the growth of e-commerce exports from India, and there is a need to bring mindset change to unlock the sector's potential. Market participants paid no heed towards the Finance Ministry’s statement that the net direct tax collection increased 23.51 per cent to over Rs 8.65 lakh crore till mid-September on higher advance tax mop-up from corporates. Finally, the BSE Sensex fell 796.00 points or 1.18% to 66,800.84 and the CNX Nifty down by 231.90 points or 1.15% to 19,901.40.

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