Weakness hit over Indian equity benchmarks on Thursday, with both the larger peers, Sensex and Nifty, closing lower by around 1.25% each. The markets made a lackluster start of the day, as tax collection missed target by a wide margin. As against a steep 17.5 percent higher tax collection budgeted for the full year, the government could mop-up only 4.7 percent more so far this year, with the direct tax kitty growing to Rs 5.50 lakh crore as of September 17, up from Rs 5.25 lakh crore a year-ago. Adding more concerns, the India Meteorological Department's (IMD) report showed that monsoon rains in India in the week to September 18 were above average for a third straight week, with floods hitting many districts in the central parts of the country and damaging crops such as soybean and pulses. Indices remained under pressure for the whole day, amid a private report that India's slowdown & a simmering shadow banking crisis is putting Prime Minister Narendra Modi's goal of crafting a $5 trillion economy by 2025 at risk. Traders paid no heed towards reports that the government decided to set up an 11-member panel. The latest decision is in line with the government's objective of promoting ease of doing business for law abiding corporates, fostering improved corporate compliance for stakeholders at large & also to address emerging issues having impact on the working of companies in the country. Investors also overlooked Niti Aayog CEO Amitabh Kant's statement that the government is doing everything possible to turn around the Indian economy & bring it back to a high trajectory growth path. Finally, the BSE Sensex fell 470.41 points or 1.29% to 36,093.47, while the CNX Nifty was down by 135.85 points or 1.25% to 10,704.80.

The US markets ended mostly higher on Thursday following better-than-expected housing and manufacturing data a day after the second interest rate cut of 2019 by the Federal Reserve. A report on the US housing market and manufacturing data in the Philadelphia area helped to hearten investors about the state of the US economy. The National Association of Realtors said existing-home sales rose 1.3% in August from the previous month to a seasonally adjusted annual rate of 5.49 million, marking the strongest pace of sales since March of last year. The Philadelphia Federal Reserve's manufacturing index fell to 12.0 in September after registering a reading of 16.8 in August. Any reading above zero indicates improving conditions. Meanwhile, after reporting a much bigger than expected drop in first-time claims for US unemployment benefits in the previous week, the Labor Department released a report showing a modest rebound in initial jobless claims in the week ended September 14. The report said initial jobless claims inched up to 208,000, an increase of 2,000 from the previous week's revised level of 206,000. Street had expected jobless claims to climb to 213,000 from the 204,000 originally reported for the previous week. Despite the upward revision, jobless claims in the previous week were at their lowest level since hitting a nearly 50-year low of 193,000 in April. Some cautiousness prevailed in the markets amid continued uncertainty about the outlook for interest rates following the Federal Reserve's monetary policy announcement on Wednesday. The Fed lowered interest by 25 basis points as expected but indicated officials are mixed about whether the central bank should cut rates again before the end of the year. While seven participants expect another rate cut before the end of year, five expect rates to remain unchanged and another five expect rates to be raised back to 2 to 2-1/4 percent.

Crude oil prices ended marginally higher on Thursday amid reports disruptions to refining activity in Texas due to flooding from Tropical Storm Imelda and a likely drop in demand for crude. Oil prices got an early boost after a private report that Saudi Arabia was looking to buy oil and additional oil products from Iraq and possibly other neighbors, including a request for as much as 20 million barrels of oil from Iraq, as it scrambles to maintain its reputation as a reliable supplier after missiles knocked out around half of the country's crude production over the weekend. Benchmark crude oil futures for October gained 2 cents to settle at $58.13 a barrel on the New York Mercantile Exchange. November Brent surged 80 cents or 1.3 percent to settle at $64.40 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally weaker against the American currency on Thursday, due to fresh dollar demand from banks and importers. Sentiments remained down-beat with the India Meteorological Department's (IMD) report that monsoon rains in India in the week to September 18 were above average for a third straight week, with floods hitting many districts in the central parts of the country and damaging crops such as soybean and pulses. Heavy losses in domestic equity markets also weighed on the domestic unit. However, losses remain capped as some optimism remained among the traders with Niti Aayog CEO Amitabh Kant's statement that the government is doing everything possible to turn around the Indian economy and bring it back to a high trajectory growth path. On the global front, Japanese yen rallied on Thursday after the Bank of Japan kept interest rates on hold, while the dollar struggled to move higher despite the Federal Reserve offering mixed signals about the path for further easing. Finally, the rupee ended at 71.34, 10 paise weaker from its previous close of 71.24 on Wednesday.

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 2841.75 crore against gross selling of Rs 3773.98 crore, while in the debt segment, the gross purchase was of Rs 1449.27 crore with gross sales of Rs 1347.36 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.12 crore against gross selling of Rs 6.88 crore.

The US markets ended mostly higher on Thursday with modest gains as the US and China kicked-off deputy level trade negotiations for the first time in close to two months. Asian markets are trading mostly in green on Friday as economic stimulus around the world eased fears of economic deceleration. Indian markets ended lackluster session in red territory on Thursday, with cut of over a percent, amid selling seen across the board as oil prices rose sharply once again. Today, the markets are likely to open in green amid positive leads from Asian peers. Traders will be getting some encouragement with Reserve Bank of India (RBI) Governor Shaktikanta Das' statement that there is room for rate cut as the growth has slowed down. The policy objective of the monetary policy is to maintain price stability, keeping in mind the objective of growth. Separately, Das expressed the hope that the ongoing crisis in Saudi Arabia that has spiked crude prices to multi-year highs will have limited impact on inflation and fiscal numbers. Some support will also come with report that Finance minister Nirmala Sitharaman is likely to unveil measures to boost economic growth, which slipped to a six-year low of 5% in the April-June quarter. Investors will be looking ahead to the Goods and Services Tax (GST) Council meeting later in the day to take up a host of issues and on top of the agenda will be recommendations made by the GST Council's Fitment Committee. As per the report, the committee has rejected the proposal to cut GST on biscuits and for the auto sector. However, some cautiousness may come with report that the Organisation for Economic Co-operation and Development (OECD) appears to be the most pessimistic on India's economy among think tanks, as it cut the GDP growth forecast by 1.3 percentage points to 5.9 per cent for 2019-20. Meanwhile, capital market regulator SEBI has set up a high-level panel to suggest possible structures and regulations for creating social stock exchanges to facilitate listing and fund-raising by social enterprises as well as voluntary organizations. Banking stocks will be in focus as credit rating agency Moody's said that the increasing liquidity stress among real estate developers would indirectly hit Indian banks and is thus credit negative for the domestic lenders. There will be some buzz in the power stocks as India Ratings & Research (Ind-Ra), a Fitch Group company, maintained a stable outlook for wind and solar power sectors for the remaining part of financial year 2019-20 (FY20).

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

Nifty Top volumes

• M&M has delivered 400 small commercial vehicles in Bihar and Jharkhand in a single day ahead of the festive season. 
• Maruti Suzuki India has achieved the milestone of one millionth car exports from the Mundra Port in Gujarat. 
• Tata Motors has unveiled its state-of-the-art electric vehicle technology ZIPTRON, which will power a range of aspirational Tata Electric Cars, starting with a new launch in Q4 of FY20.  
• WCCL, the consumer care business of Wipro, has set up a venture fund to invest in start-ups in the consumer brands space with India and South East Asia being focus markets.