Sentiments in the local markets worsened as lack of significant upside triggers on the domestic front and discouraging developments from the global front continue to dissuade investors from Indian equities. The session was marred by panic selling in equity bourses across the globe after China's steel exports declined unexpectedly and the minutes of US Federal Reserve Open Market Committee indicated a strengthening case for a rate hike. On the domestic front, sentiments remained dismal on the report that Industrial production contracted once again for the month of August. IIP dipped 0.7 percent in August, due to a slump in manufacturing and mining, in the manufacturing space, capital goods brought about the maximum fall.  Markets participants remained on the sidelines and refrained from any buying activity ahead of monthly inflation data based on consumer price index (CPI) for September due later in the day and wholesale price index (WPI) due on Friday. Besides, the proposed investigation of investment through P-Notes and weakness in the rupee against the dollar too dampened sentiment. Further, special investigation team (SIT) on black money asked the SEBI to furnish the details of all those investing through participatory notes (P-Notes). This is the first time the government-constituted body has sought such massive amount of data, which includes the list of beneficial owners and transfer trials of investors taking the P-Note route to invest in domestic equity and debt markets. Investors failed to draw any sense of relief with the report that the government's revenue collection in April to September -- the first half of the current fiscal -- saw indirect tax-mop up growing at an impressive 26 percent. The total direct and indirect tax collections at the end of September stood at Rs 7.35 lakh crore, almost half the Rs 16.26 lakh crore target for 2016-17. Finally, the BSE Sensex declined by 439.23 points or 1.56% to 27643.11, while the CNX Nifty dropped 135.45 points or 1.56% to 8,573.35. 

The US markets closed lower on Thursday, as investors grew jittery following the Federal Reserve's latest meeting minutes as well as weak Chinese economic reports. Historically low interest rates have helped drive investors into stocks and other riskier assets, and investors fear that another rate increase could help lead to the end of that trend. But the street also noted that a rate rise would signal confidence in the US economy, and some have highlighted how the stock market has tended to perform well in the earlier part of a tightening process. Investors also grappled with geopolitical tensions as the US officially joined the conflict in Yemen by firing cruise missiles at radar sites in areas controlled by Iran-backed Houthi rebels. On the economy front, the number of people who applied for unemployment benefits was flat at 246,000 in the first week stretching from October 2 to October 8 as the rate of layoffs sank to a 43-year low. The level of new claims two weeks ago was revised down to 246,000 from 249,000 to set a new post-recession low. The current week matched that number. Initial jobless claims have been under 270,000 for 15 straight weeks, a reassuring sign that companies are growing fast enough to keep current staffing levels. The Dow Jones Industrial Average lost 45.26 points or 0.25 percent to 18,098.94, Nasdaq dropped 25.69 points or 0.49 percent to 5,213.33, while S&P 500 was down 6.63 points or 0.31 percent to 2,132.55.

Crude oil futures moved higher on Thursday, even as the Energy Information Administration (EIA) reported that U.S. crude oil inventories had jumped by 4.9 million barrels in the week to October 7, it was the first crude build since the end of August. However, the EIA reported a drop of 3.7 million barrels for distillates, which include diesel and heating oil, and 1.9 million barrels decline for gasoline. Benchmark crude oil futures for November delivery gained $0.26 or 0.5 percent to close at $50.44 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for December delivery was up by $0.22 or 0.4 percent to $52.03 a barrel on the ICE.

India rupee ended considerably weaker against US dollar as investors indulged in trimming their bets after the minutes of the US Federal Reserve's September meeting indicated a possible rate hike this year. The sentiments were under pressure on the report that Industrial production data contracted once again for the month of August. IIP dipped 0.7 percent in August, due to a slump in manufacturing and mining, in the manufacturing space, capital goods brought about the maximum fall. Weakness in Asian currencies after China's exports unexpectedly declined too weighed on the rupee sentiments. Markets participants remained on the sidelines ahead of monthly inflation data based on consumer price index (CPI) for September due later in the day and wholesale price index (WPI) due on Friday. Finally, the rupee ended at 66.94, 41 paise weaker from its previous close of 66.53 on Monday.

The FIIs as per Thursday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 1786.40 crore against gross selling of Rs 2270.50 crore, while in the debt segment, the gross purchase was of Rs 1164.31 crore with gross sales of Rs 521.53 crore. 

The US markets despite recovering from the day's low ended in red in the last session. Concern about the global economy contributed to the early weakness, while value buying at reduced levels after the drop helped the bourses in some recovery. The Asian markets have made mostly a green start and the oversold Hong Kong market was showing some recovery after data showed inflation in China beat expectations, boosting optimism about the strength of the world's second-largest economy. The Indian markets suffered sharp selling pressure and the major averages lost over one and half a percent reeling under global turmoil in last session. Today, the start is likely to be in green and some recovery can be expected after the sharp fall of last session. Traders will be getting some support with retail or CPI inflation hitting a 13-month low, aided by lower food prices especially those of vegetables. This is the first time in this financial year that the overall CPI-based inflation has fallen below the Reserve Bank of India's inflation target of 5 per cent by March 2017. Also, there are reports that government may seek parliamentary approval to spend about $7.5 billion more on roads, railways and other public programmes over the next five months. Meanwhile, Finance Minister Arun Jaitley has blamed the successive governments' inability to bring in reforms in the infrastructure and power sectors for the rising non-performing assets in the core segments.The IT sector will keep buzzing, as TCS-India's biggest infotech company in terms of revenue, profits and market value, reported near flat 8.44 per cent rise in second quarter profits at Rs 6,586 crore as against Rs 6,073 crore in the quarter ended September 2015 as growing uncertainties in the environment led to "holdbacks in discretionary spending" by customers.

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

Nifty Top volumes

• TCS has reported 4.11% rise in its net profit at Rs 5958 crore for the quarter under review as compared to Rs 5723 crore for the same quarter in the previous year.
• Dr. Reddy's Laboratories has launched Aripiprazole tablets, USP, in 2 mg, 5 mg, 10 mg, 15 mg, 20 mg, and 30 mg, a therapeutic equivalent generic version of Abilify tablets in the United States market approved by the USFDA.
• ICICI Bank has successfully executed transactions in international trade finance and remittance using blockchain technology in partnership with Emirates NBD, a leading banking group in the Middle East.
• Cipla has received Establishment Inspection Report from the USFDA for its Indore facility indicating formal closure of the USFDA inspection conducted in July/August, 2015.
• Tata Motors is planning to offer the fifth series of its rated, listed, unsecured, redeemable, NCDs aggregating to Rs 500 crore.