Monday turned out to be a daunting session for the Indian equity indices, which got pounded by over a percentage point on feeble global cues. After gap-down opening, the domestic bourses never looked in recovery mood and continued moving northward to end at intraday lows, breaching their crucial support levels of 28,300 (Sensex) and 8,750 (Nifty). Investors were anxiously waiting the upcoming monetary policy review on October 4, the first to be held under newly appointed Reserve Bank of India (RBI) Governor Urjit Patel, amid expectations of a 25 basis point cut in the repo rate. But, market participants failed to get any sense of relief with RBI Governor, Urjit Patel downplaying the risk of inflation and harping on the focus on growth. Patel reportedly said that the GST regime would not harden inflation and the growth objective will remain part of the newly constituted MPC's mandate. Traders also shrugged off Niti Aayog Vice-Chairman Arvind Panagariya's statement that a good monsoon, reforms and timely decision making at the Centre will definitely push India's growth beyond the 8 per cent mark in subsequent quarters of this fiscal. Selling got intensified after European counters made a feeble start on Monday, as investors trod cautiously ahead of an Organization of the Petroleum Exporting Countries (OPEC) producers meeting in Algeria this week. All the Asian markets ended in red terrain, as investors' attention turned from central banks to American politics ahead of the first US presidential debate.  Back home, selling was both brutal and wide-based as most of sectoral indices on BSE ended in red terrain. Finally, the BSE Sensex declined by 373.94 points or 1.30% to 28,294.28, while the CNX Nifty dropped 108.50 points or 1.23% to 8,723.05.

The US markets closed lower on Monday, as worries about Germany's Deutsche Bank weighed on the financial sector while the upcoming US presidential debate also contributed to jittery sentiment. The mounting uncertainty as the presidential race is pushing some investors to unwind positions. Crude-oil futures recovered on renewed hopes that the Organization of Petroleum Exporting Countries and other major oil producers, including Russia, might make progress on a deal to limit production. The producers will meet on the sidelines of an energy conference in Algeria on Wednesday. On the economy front, sales of newly-constructed homes dropped 7.6% in August but beat forecasts. New home sales ran at a 609,000 seasonally adjusted annual rate. That was 20.6% higher compared to a year ago. The data tracking sales of new homes is often volatile and economists had expected a sharp reversal from the near 9-year high notched in July, but August numbers beat the median forecast of a 600,000 rate. The Dow Jones Industrial Average lost 166.62 points or 0.91 percent to 18,094.83, Nasdaq dropped 48.26 points or 0.91 percent to 5,257.49, while S&P 500 was down 18.59 points or 0.86 percent to 2,146.10. 

Crude oil futures bounced back on Monday, amid speculation Russia will join OPEC nations in curbing production if the cartel can reach an agreement in Algiers this week. Traders even ignored the Commerce Department report of a sharp pullback in new home sales in the month of August. Meanwhile, the 15th International Energy Forum kicked off in Algiers on Monday, though OPEC members, led by Saudi Arabia and other big Middle East crude exporters, such as Iran and Iraq, will meet non-OPEC producer Russia on the last day of the conference. Benchmark crude oil futures for October delivery surged by $1.45 or 3.3 percent to close at $45.93 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery gained $1.54 or 3.4 percent to $47.43 a barrel on the ICE.

Indian rupee, after making a weak start, recouped substantial ground and ended stronger against dollar on Monday despite weak local equities. Local currency got some support with Niti Aayog Vice-Chairman Arvind Panagariya's statement that a good monsoon, reforms and timely decision making at the Centre will definitely push India's growth beyond the 8 per cent mark in subsequent quarters of this fiscal. However, investors remained cautious ahead of the first US presidential debate. On the global front, yen strengthened against dollar after a speech by Bank of Japan Governor Haruhiko Kuroda stating that the bank is willing to use every possible tool, if necessary, to achieve its price stability objective. Kuroda said that there is no better opportunity than now to completely get out of deflation. Finally, the rupee ended at 66.61, 5 paise stronger from its previous close of 66.66 on Friday.

The FIIs as per Monday'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 5755.00 crore against gross selling of Rs 6002.71 crore, while in the debt segment, the gross purchase was of Rs 1935.79 crore with gross sales of Rs 1386.40 crore. Thus, FIIs stood as net buyers of Rs 549.39 crore in debt.

The US markets plunged in last session and the tech-heavy Nasdaq pulled back further off the record closing high set last Thursday, with traders looking ahead to highly anticipated presidential debate. The Asian markets have made a mixed start with some indices trading marginally in red, though the Chinese markets was in green albeit modestly, as industrial corporations jumped the most in three years, adding to evidence of continued stabilization in manufacturing and boosting prospects for their ability to repay debt. The Indian markets suffered sharp slump in last session and the major averages lost over a percent on global jitters, with investors shunning stocks and bracing for a potentially pivotal US presidential debate. Today, the start is likely to remain cautious on weak global cues. Investors are also looking ahead to the Reserve Bank of India's rate-setting meeting on October 4 amidst the backdrop of declining retail inflation. However, traders may get some support with statement of Ravindra Dholakia, one of the three government appointees to the newly formed Monetary Policy Committee (MPC) that there will be no tug of war in the MPC. Meanwhile, the tax department just within the week after the first meeting of the GST Council, has came out with three draft rules and their formats relating to registration, invoice and payments which would be finalised by week-end. There will be some buzz in the oil & gas sector stocks on Moody's Investors Service's report that  India's petroleum consumption will grow at 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. The telecom space too will be in action, as the Telecom Regulatory Authority of India (TRAI) has raised concern over high rate of call failure between the networks of newcomer Reliance Jio Infocomm and other telecom companies.

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

Nifty Top volumes

• ONGC has received an approval for signing of a preliminary agreement for buying a stake in Gujarat government firm GSPC's KG basin gas block.
• ICICI Bank has organized 13 currency exchange melas in Odisha to offer a free facility of exchanging currency notes with coins to the general public.
• M&M has received approval for issuance and offer of 4,750 Rated, Listed, Unsecured, Redeemable, 7.57% NCD of face value Rs 10,00,000 each, at par, aggregating to Rs 475 crore on private placement basis.
• Hero MotoCorp has launched new Achiever 150 priced at Rs 61800 and Rs 62800 (ex-showroom, Delhi).
• TVS Motor company has launched 24/7 Road Side Assistance Program  for its 2 wheeler customers across the country.