Bears dominated Dalal Street on Wednesday's session, with Sensex & Nifty closing lower by over 1.25% each. The markets made a negative start of the day, as the Asian Development Bank (ADB) lowered India's gross domestic product (GDP) growth forecast to 6.5 percent for the current fiscal (FY20), weighed down by the GDP growth slipping to a six-year low in the April-June quarter of 2019-20. Adding more worries, rating agency ICRA said though domestic apparel exports are expected to remain in the positive zone during rest of the year, there are multiple threats looming which could slow down the pace and make it challenging for exporters. Key indices remained weak for the whole day, amid reports that India's fiscal deficit gap is set to increase by at least 70 basis points to 4 percent of the gross domestic product (GDP) for 2019-20 after Finance Minister Nirmala Sitharaman announced a cut in corporate tax rates on September 20. Market participants overlooked RBI Governor Shaktikanta Das' statement that the government's recent move to slash corporate tax rate made India a very attractive destination for foreign investment. He said India's corporate tax now becomes very competitive compared to other emerging market economies in ASEAN and other parts of Asia. Finally, the BSE Sensex slipped 503.62 points or 1.29% to 38,593.52, while the CNX Nifty was down by 148.00 points or 1.28% to 11,440.20.

The US markets ended higher on Wednesday after President Donald Trump said that a US-China trade deal could happen sooner than expected. Besides, markets also moved to the upside in reaction to the release of the transcript of President Donald Trump's controversial call with Ukrainian President Volodymyr Zelensky. The transcript confirms Trump discussed a possible investigation of former Vice President and Democratic frontrunner Joe Biden in the call with Zelensky, although he does not directly link the issue to US aid. The release of the transcript comes amid claims Trump threatened to withhold military aid from Ukraine unless Zelensky conducted an investigation of Biden and his son Hunter. On the economic front, reflecting an extension of the volatility seen in recent months, the Commerce Department released a report showing US new home sales rebounded strongly in the month of August following a sharp pullback in the previous month. The Commerce Department said new home sales surged up by 7.1 percent to an annual rate of 713,000 in August after plunging by 8.6 percent to a revised rate of 666,000 in July. Street had expected new home sales to jump by 3.9 percent to a rate of 660,000 from the 635,000 originally reported for the previous month. The bigger than expected rebound came as new home sales in the West bounced back, spiking by 16.5 percent to a rate of 191,000 in August after plummeting by 15.9 percent to 164,000 in July. Dow Jones Industrial Average surged 162.94 points or 0.61 percent to 26970.71, Nasdaq gained 83.76 points or 1.05 percent to 8077.38 and S&P 500 was up by 18.27 points or 0.62 percent to 2984.87.

Extending their previous session's losses, crude oil futures ended lower on Wednesday as US government data revealed a second weekly climb in domestic crude inventories. The Energy Information Administration (EIA) reported that US crude supplies rose for a second week in a row, by 2.4 million barrels for the week ended September 20. The American Petroleum Institute on Tuesday reported a climb of 1.4 million barrels. The EIA data showed that gasoline inventories rose by 500,000 barrels, while distillate stockpiles declined by 3 million barrels last week. Besides, oil prices also declined on reports that Saudi Arabia had restored most of crude production capacity, recovering from attacks on its facilities earlier this month. Benchmark crude oil futures for October declined 80 cents or 1.4 percent to settle at $56.49 a barrel on the New York Mercantile Exchange. November Brent dropped 71 cents or 1.1 percent to settle at $62.39 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against US dollar on Wednesday, due to fresh demand for the American currency from banks and importers. Traders remained cautious as the Asian Development Bank (ADB) lowered India's gross domestic product (GDP) growth forecast to 6.5 percent for the current fiscal (FY20), weighed down by the GDP growth slipping to a six-year low in the April-June quarter of 2019-20. Heavy losses in the domestic equity market along with dollar's strength against major global currencies overseas also weighed on the domestic unit.  On the global front, dollar recovered on Wednesday after falling when a formal impeachment inquiry began against US President Donald Trump, while the latest Sino-US trade row hurt currencies correlated with global growth. Finally, the rupee ended at 71.04, 3 paise weaker from its previous close of 71.01 on Tuesday.

The FIIs as per Wednesday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 5338.88 crore against gross selling of Rs 6085.93 crore, while in the debt segment, the gross purchase was of Rs 877.56 crore with gross sales of Rs 1066.43 crore. Besides, in the hybrid segment, the gross buying was of Rs 87.10 crore against gross selling of Rs 81.81 crore.

The US markets ended higher on Wednesday on robust US housing data and the notion a strong economy would overcome any investor skittishness over a possible impeachment of President Donald Trump. Asian markets are trading mostly in green on Thursday amid hopes that the US and China may soon end their year-long trade war boosted demand for riskier assets. Indian markets declined on Wednesday tracking heavy losses in banking and auto stocks as investors turned jittery over geopolitical uncertainties and global slowdown concerns. Today, the start of F&O expiry session is likely to be in green tracking positive global cues coupled with sharp fall in crude oil prices. However, the expiry day is very much likely to bring in volatility later in the day. Traders will be taking some encouragement with report that easing the regulatory framework for foreign portfolio investors, SEBI has simplified KYC requirements for them and permitted them to carry out the off-market transfer of securities. Besides, the regulator has broad-based the classification for foreign portfolio investors (FPIs) and simplified their registration process. Some support will also come with Employees' State Insurance Corporation's (ESIC) latest payroll data showing that around 14.24 lakh jobs were created in July, higher than 12.49 lakh in the previous month. Though, some concern may come with report that the United Nations Conference on Trade and Development (UNCTAD) has forecast India's growth to moderate to 6% in 2019 from 7.4% in 2018 due to lower-than-targeted tax collections and limited public spending. Traders may take note of NITI Aayog CEO Amitabh Kant's statement that the government is determined to take India back to a high trajectory growth rate of 8-9 percent and the real challenge before the country is to sustain that growth. Meanwhile, SEBI has come out with new norms that make it mandatory for companies to provide details on delayed loan repayments and possible defaults to credit rating agencies amid concerns over banks citing client confidentiality to resist sharing of such information by their borrowers. Public sector banking stocks will be in focus with rating agency ICRA's report that profitability and return on assets (RoA) of public sector banks (PSBs) are likely to remain low during the current financial year on the back of continued provisioning on existing and fresh bad loans. There will be some buzz in the telecom stocks with Trai's report that gross revenue of telecom operators slipped 7.13% in 2018, while licence fee and spectrum charges that the government collects from them fell 10.29% and 17.7%, respectively, during the year.

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

Nifty Top volumes

• SBI has launched its digital banking app YONO in the UK, marking its global launch. 
• Maruti Suzuki India has decided to reduce the price of select models by Rs 5,000. 
• ZEE5, a video on demand website run by Zee Entertainment Enterprises, has entered into partnership with Kaltura for the deployment of the Kaltura TV Platform Player. 
• QNB Group has selected the TCS BaNCS Global Securities Platform to support the digital transformation of its capital markets operations.