Last hour selling dragged the markets down on Monday, with Sensex and Nifty giving up their crucial psychological levels of 34,200 and 10,250, respectively. The key indices made a positive start of the week, aided by a private report stating that India is likely to emerge as the third-largest economy in the world in just over a decade from now, surpassing Japan and Germany.  Traders got relief after the Finance Ministry extended the deadline for filing the GSTR-3B summary return of sales for September by five days to October 25. With this extension, businesses, which wish to claim input tax credit (ITC) benefit for July 2017-March 2018 period, can do so till October 25. Adding some optimism, ASSOCHAM said that the Reserve Bank of India's decision to incentivise banks will help NBFCs in tackling liquidity crunch. The RBI allowed the banks to use government securities equivalent to their incremental credit to NBFCs for a three-month period to meet their liquidity coverage ratio requirements. However, in the last hour of the trade, the markets erased all of their gains to end the session lower, despite firm cues from global markets. The market participants got cautious as traders' body CAIT warned that allowing central as well as state tax administrations to initiate action against any taxpayer irrespective of jurisdiction would lead to harassment of traders and complicate the tax system. Anxiety spread on the street after job creation slowed down by 8.39 percent to stand at 8,94,769 in August month as against the revised figure of 9,76,675 in July month. The trade also got hit with the Reserve Bank of India's (RBI) report showing that India's forex reserves declined by $5.14 billion during the week ended October 12, when the rupee slipped to 74 and beyond against the US dollar. Meanwhile, the Central Board of Direct Taxes (CBDT) said that the number of taxpayers earning above Rs 1 crore per annum has risen to over 1.40 lakh in the country in the last four years, depicting a growth of about 60 percent. Finally, the BSE Sensex plunged 181.25 points or 0.53% to 34,134.38, while the CNX Nifty was down by 58.30 points or 0.57% to 10,245.25.

The US markets closed mostly lower in choppy trading session on Monday as early support from a rally in China faded, with lower oil prices and disappointing earnings signals from firms including Halliburton and Hasbro helping pull the market lower. Chinese stocks surged higher amid optimism about additional stimulus to stimulate the world's second largest economy after last week's disappointing Gross Doemstic Product (GDP) data. After three top Chinese financial regulators stepped in to bolster investor confidence last Friday, Chinese President Xi Jinping vowed unwavering support for the country's private sector. Moreover, traders expressed some uncertainty about the near-term outlook for the markets following recent volatility. A lack of major US economic data also kept some traders on the sidelines ahead of the release of reports on new home sales, durable goods orders, and consumer sentiment in the coming days. The Federal Reserve is also due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts. The report may shed additional light on the outlook for interest rates. Dow Jones Industrial Average slipped 126.93 points or 0.50 percent to 25,317.41 and S&P 500 was down by 11.90 points or 0.43 percent to 2,755.88, while Nasdaq gained 19.60 points or 0.26 percent to 7,468.63.

Crude oil futures ended slightly higher on Monday with traders appearing a bit uncertain about the impact of US sanctions on Iran on global crude supply. Traders were also closely following the developments with regard to the ongoing US-Saudi Arabia spat. Meanwhile, the Saudi Oil Minister Khalid al-Falih has reportedly said that the kingdom has no intention of an oil embargo on Western consumers, despite the current crisis following allegations that it murdered journalist Jamal Khashoggi. Benchmark crude oil futures for November gained 5 cents or 0.1 percent to settle at $69.17 a barrel on the New York Mercantile Exchange. December Brent crude edged up by a nickel, or less than 0.1 percent to settle at $79.83 a barrel on London's Intercontinental Exchanged.

Indian rupee pared all of its gains and ended weaker against the American currency on Monday, due to fresh demand for the American currency from banks and importers. Traders remained cautious with the Reserve Bank of India's (RBI) report showing that India's forex reserves declined by $5.14 billion during the week ended October 12, when the rupee slipped to 74 and beyond against the US dollar. The RBI's weekly statistical supplement showed that overall forex reserves decreased to $394.46 billion from $399.60 billion reported for the week ended October 5. Adding pessimism among investors, job creation slowed down by 8.39 percent to stand at 8,94,769 in August month as against the revised figure of 9,76,675 in July month. Besides, dollar's strength against major global currencies overseas along with late hour selloff in the domestic equity markets, weighed on the rupee sentiment. On the global front, euro failed to hold early-session gains on Monday as investors focused on the likelihood of further political uncertainty in Europe over Italy's spending plans, despite a large drop in Italian government borrowing costs. Finally, the rupee ended at 73.56, 24 paise weaker from its previous close of 73.32 on Friday.

The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 6896.90 crore against gross selling of Rs 7557.58 crore, while in the debt segment, the gross purchase was of Rs 1073.74 crore with gross sales of Rs 1224.10 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.48 crore against gross selling of Rs 1.36 crore.

The US markets closed mostly lower on Monday, as investors braced for a deluge of earnings against the backdrop of higher interest rates and concerns about global growth. Asian markets were trading in red on Tuesday, following weak trade on Wall Street, as investors remain cautious over mounting geopolitical tensions around the world. Indian markets wiped out all of their early gains to settle in red territory for third straight session on Monday, due to late sell-off in oil & gas, consumer durables, PSU, IT and infrastructure stocks amid crude again rising past $80 a barrel. Today, the markets are likely to make negative start tacking weak trade in other Asian counterparts amid global growth concerns. There will be some cautiousness with a private report stating that India is the second-most underinsured country in the world with an insurance gap of $27 billion (approximately Rs 1.98 lakh crore). traders will react negatively to another private report that the crude oil import bill for India is expected to increase by $37 billion to $125 billion during the current financial year (2018-19, or FY19) - a 42% spike over the 2017-18 (FY18) bill of $88 billion. However, some support may come later in the day with the Central Board of Direct Taxes (CBDT) data showing that the net direct tax collection in the country grew by 15.7% on year-on-year basis to reach Rs 4.89 lakh crore in the current fiscal till third week of October. This marks over 42% of the full-year direct tax collection target of Rs 11.5 lakh crore for the fiscal ending March 31, 2019. Traders may take note of report that the Central government expressed hope exports would touch an all-time high in 2018-19. There will be some buzz in the banking sector stocks with Moody's Investors Service's statement that the profitability of Indian banks is distinctively weak compared to those in BRICS nations, but it will improve from next fiscal as asset quality stabilises. On capitalisation, Moody's said it is the weakest for Indian banks with a tangible common equity ratio of 8.7% at the end of 2017. There will be some reaction in sugar sector stocks with report that a second bailout package for sugar industry could be in the offing as the food ministry plans to float a Cabinet note seeking loan incentives for ethanol producers. This will be in addition to the sugar package announced in June. There will be lots of earnings reaction based on the performance of the companies, to keep the markets buzzing.

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

Nifty Top volumes

• NTPC is planning to start biomass co-firing across all its coal-based thermal power stations in a view to reduce greenhouse gas emissions and cut pollution. 
• Hero MotoCorp has launched the new Destini 125 scooter. 
• TCS has launched TCS BaNCS for Payments V12 at SIBOS 2018.  
• SBI is planning to raise up to Rs 25,000 crore in FY19, including up to Rs 5,000 crore through bonds to meet capital adequacy norms.