Last session of September F&O series turned out to be a big disappointment for the Indian benchmarks which disintegrated like a ‘house of cards' and went on to breach many key technical levels in around two percent freefall. After a smart up move in opening trades, Indian equity indices witnessed a panic selling in noon session after the Indian army said it has conducted surgical strikes on Wednesday night on terrorist launch pads in Pakistan, killing several terrorists and causing significant casualties to their hideouts. The Army said special commandos crossed the LoC last night, conducted the operation in the Pakistan-Occupied Kashmir (PoK) and returned to the Indian side without any casualty. India had repeatedly warned Pakistan not to allow its territory to be used for terrorist activities. Besides, India had called for an international diplomatic boycott of Pakistan as it shielded terrorists on its land. At the United Nations General Assembly, External Affairs Minister Sushma Swaraj said Pakistan was a terror state and it need to rein in terror elements. Though, investors got some respite in afternoon session after Niti Aayog Chief Amitabh Kant said the market should be confident and take government's move positively, selling once again intensify in late afternoon session after Pakistan Prime Minister Nawaz Sharif strongly condemned the unprovoked and naked aggression by India along the LoC and said Pakistan's armed forces are fully capable of defending the territorial integrity of the country. Sharif also warned that Pakistan's intent for peaceful neighborhood should not be mistaken as its weakness. The fear among investors was palpable all over, as Nifty VIX spiked some 35 percent to hit a three-month high to 19.12.  Anxiety was not limited to stocks markets; rupee and bonds too plunged after the army said it attacked terrorist camps in Pakistan. The weakness in domestic currency intensified amid concerns that foreign investors, who have pumped in about Rs 50,000 crore into domestic stocks so far this year, may run for the exit door if the tensions were to rise further. Finally, the BSE Sensex declined by 465.28 points or 1.64% to 27827.53, while the CNX Nifty dropped 153.90 points or 1.76% to 8,591.25.

The US markets closed lower on Thursday, following a sell-off fueled by investor worry about European banks and talk of a December rate increase by the Federal Reserve. Investors were following embattled giant German lender Deutsche BankAG, which has been buffeted by concerns about the health of its balance sheet, specifically its ability to withstand a potential $14 billion fine from the US Justice Department. On the economy front, applications for unemployment benefits rose 3,000 to 254,000 in late September week stretching from September 18 to September 24, but the low level of initial claims points to a steadily improving labor market in which jobs are the easiest to find in years. Initial jobless claims slid below 300,000 in 2015 and have stayed there for 82 straight weeks. And new claims have tallied less than 270,000 for three months, a feat last accomplished in 1973. The Dow Jones Industrial Average lost 195.79 points or 1.07 percent to 18,143.45, Nasdaq dropped 49.40 points or 0.93 percent to 5,269.15, while S&P 500 was down 20.24 points or 0.93 percent to 2,151.13. 

Crude oil futures continued their upmove on Thursday, after OPEC agreed to scale back production. Though, the initial euphoria over a preliminary agreement on oil output faded a bit amid doubts over how OPEC would implement such a plan. Meanwhile, certain smaller OPEC nations like Nigeria and Libya will be allowed to pump at the current pace, but Saudi Arabia and others will limit output. OPEC said other details of the plan will be known at its policy meeting in November. A steady dollar and weak US stock market also limited some of the upside in oil. Benchmark crude oil futures for November delivery gained $0.78 or 1.7 percent to close at $47.83 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery was up by $0.55 or 1.1 percent to $49.24 a barrel on the ICE.

Indian rupee fell to its lowest level in the last one week on Thursday after India claimed the Army conducted some surgical strikes on terror launch pads across the Line of Control (LoC) and inflicted significant casualties and heavy damages on the Pakistan side. The weakness in domestic currency intensified amid concerns that foreign investors, who have pumped in about Rs 50,000 crore into domestic stocks so far this year, may run for the exit door if the tensions were to rise further. On the global front, dollar rose against the safe-haven yen on Thursday to hit an eight-day high as investors moved into riskier assets following an OPEC deal to cut oil output. Finally, the rupee ended at 66.85, 38 paise weaker from its previous close of 66.47 on Wednesday.

The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5652.76 crore against gross sell of Rs 4678.26 crore, while in the debt segment, the gross purchase was of Rs 1450.53 crore with gross sales of Rs 373.64 crore.

The US markets suffered sharp drop in last session after there was steep drop by shares of Deutsche Bank, which fell sharply on reports that several hedge funds have withdrawn excess cash and positions held at the lender. Though, the GDP showed stronger growth than expected in second quarter. The Asian markets have made mostly a lower start, with some indices losing about a percent in early deals, tailing the fall in US markets and traders moving out of riskier assets to haven assets. The Indian markets suffered sharp sell-off in last session and the benchmark indices posted their worst one day loss in last three months. The geo-political worries played the spoilsport and the September series ended on a tepid note. Today, the start of the new series is likely to be a bit soft on the weak global cues and due to the rising border tension, though markets may see some stabilization and recovery in latter trade. There will be some support with the report that Employees' Provident Fund Organisation (EPFO) has decided to invest 10% of its annual incremental deposits or an estimated Rs 13,000 crore in the current fiscal in equity exchange traded funds (ETFs). Meanwhile, GST Council chaired by Union Finance Minister Arun Jaitley will be meeting today and will finalise the rules regarding registration, refunds and payment and also take a view on exemption of goods under the upcoming Goods and Services Tax (GST) regime. It will also deliberate on a formula for payment of compensation to states for revenue loss in the aftermath of implementation of the GST. However, there will be some concern too, with a report from Labour Bureau stating that  unemployment rate in India has shot up to a five-year high of 5 percent in 2015-16, with the figure significantly higher at 8.7 percent for women as compared to 4.3 percent for men. There will be some buzz in the telecom stocks, ahead of the start of India's largest spectrum auction tomorrow.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Tata Motors and HPCL have launched the high performance range of HP Tata Motors Genuine Oil, exclusively developed for Tata Motors passenger vehicles in the Indian market.
• Yes Bank has proposed to raise additional capital aggregating up to Rs 1,000 crore by issuing Senior Unsecured Listed Rated Redeemable Long Term Bonds in the form of debentures.
• Lupin has received final approval for its Memantine Hydrochloride Extended-Release Capsules, 7 mg, 14 mg, 21 mg, and 28 mg from the USFDA to market a generic version of Allergan's Namenda XR Capsules, 7 mg, 14 mg, 21 mg, and 28 mg.
• Cipla has reportedly decided to reduce its ballooning employee cost by freezing increments of 300-400 of its top managers as part of the company's operational revamp.
• RIL joined the growing club of conglomerates offering capital to digital start-ups for not only making financial gains but also identify businesses for tomorrow.