Indian markets ended significantly lower on Monday as oil prices surged due to escalating geopolitical tensions in the Middle East. Today, start of the session is likely to be in green following gains in global markets after two US Fed officials hinted that rates may have peaked. Traders will be taking encouragement as the National Sample Survey Office (NSSO) data showed the unemployment rate for persons aged 15 years and above in urban areas declined to 6.6 per cent during April-June 2023 from 7.6 per cent a year ago. Joblessness was high in April-June 2022 mainly due to the staggering impact of Covid-related restrictions in the country. Investors will be eyeing in the inflation data to be out later in the week for more directional cues. Some support will come with a private report that a pick-up in private investment is an imperative for driving India’s growth. The report said with the government trying to bring down the fiscal deficit and the likelihood of subsidy bills going up, public capex-which seems to have led to the uptick in real-investment growth recently-may come down. There are expectations that Indian retail inflation likely eased to 5.50% last month, within the Reserve Bank of India's (RBI) tolerance band, on moderating food price rises and government subsidies that offset a surge in the cost of crude oil. However, some cautiousness may come amid foreign fund outflows. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 997.76 crore on October 9, 2023. Meanwhile, the next round of negotiations for a trade agreement between India and South American nation Peru will start from October 10. Textile industry stocks will be in focus as Cotton Association of India (CAI) said cotton exports are estimated to decline 64 per cent in 2022-23 marketing year ended September due to higher prices of the commodity in the domestic market. There will be some reaction in energy related stocks as the Organization of the Petroleum Exporting Countries (Opec) in its 2023 World Oil Outlook said that India's primary energy demand will nearly more than double to 38.5 million barrels of oil equivalent per day (mboe/d) in 2045.

The US markets ended higher on Monday as investors digested the latest news about the Israel-Hamas conflict. Asian markets are trading mostly in green on Tuesday tracking overnight gains on Wall Street.

Back home, Indian equity benchmarks snapped a two-day winning run and ended with losses of around three fourth of a percent on Monday, amid escalating geopolitical tensions in the Middle East and surging crude oil prices overseas. Benchmarks made a gap-down opening and stayed in red throughout the day as traders remained cautious after the RBI data showed that India's forex reserves drop by $3.79 billion to $586.91 billion for the week ended September 29. Besides, foreign fund outflows dented domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 90.29 crore on October 6, 2023. Traders also remained on sidelines ahead of Index of industrial production (IIP) data for August and Consumer price index (CPI) data for September slated to be announced on October 12. Traders paid no heed towards the Reserve Bank of India’s (RBI) bi-monthly consumer confidence survey (CCS) showing that consumer confidence for the September reverted to its recovery path after a brief pause in July 2023 round of the survey. The current situation index (CSI) reached a four-year high on the back of respondents' better assessment of current general economic situation and employment conditions in September 2023. Meanwhile, the commerce ministry's arm Directorate General of Trade Remedies (DGTR) has recommended an anti-dumping duty of up to 82 per cent on imports of wheel loaders from China for five years to protect domestic players. Finally, the BSE Sensex fell 483.24 points or 0.73% to 65,512.39 and the CNX Nifty was down by 141.15 points or 0.72% to 19,512.35.