Hopes of a rate cut in the monetary policy review, coupled with positive macro-economic data and value buying in frontline blue-chip stocks, helped Indian benchmark indices to end the session with the gain of over half a percent on Monday. Sentiments got a boost after a business survey showed India's manufacturing activity expanded to an eight-month high in March driven by strong rise in business orders. The Nikkei-Markit purchasing managers' index rose to 52.4 in March, up 1.3 percentage points after two months at 51.1 this year. This is a third consecutive monthly improvement in business conditions across the sector. Some support also came with the report that the government achieved the fiscal deficit target for the year, putting an end to speculation after February numbers came in on the high side and reinforcing the commitment to fiscal discipline ahead of the Reserve Bank of India monetary policy review scheduled for April 5. Further, market participants also got some encouragement with India's latest monsoon forecasting model predicting good rainfall this year, which will end severe water shortage that is threatening power supply and could cheer farmers who have been devastated by two consecutive droughts. On the global front, Asian marked ended the session on positive note on Monday, however, European shares declined to near a one-month low in early trade. Back home, after starting the trade on firm note, Indian benchmark indices showed some strength in early trade, but the sentiments turned pessimistic in late morning trades and indices started drifting lower, however the market regained its momentum in the final hour of trade and finished the day gaining around half a percent. Finally, the BSE Sensex gained 130.01 points or 0.51% to 25399.65, while the CNX Nifty rose 45.75 points or 0.59% to 7,758.80.

The US market closed lower on Monday, as losses for industrials and materials offset sharp gains in health-care shares. A fresh drop in oil prices weighed on risk appetite, eroding investor confidence after last week's comments from Federal Reserve Chairwoman Janet Yellen which had helped support stock advances. Crude prices fell as comments by a Saudi Arabian prince dampened hopes for an output-freeze deal from major oil producers. Major oil producers are set to hold a meeting April 17 to discuss measures to curb production, but Saudi Arabia has stated that it would not freeze productions unless Iran also does so. Investors have turned their attention to the earnings season over the next month, starting next week. On the economy front, factory orders fell sharply in February, after a collapse in bookings for oil equipment and planes. Factory orders fell 1.7%, marking the third fall in four months. Orders for durable goods were revised to show a 3% decline instead of the previously reported 2.8% fall. The Dow Jones Industrial Average lost 55.75 points or 0.31 percent to 17,737.00, Nasdaq dropped 22.74 points or 0.46 percent to 4,891.80 while, S&P 500 was down by 6.65 points or 0.32 percent to 2,066.13.

Crude oil futures extended their decline and ended near one-month lows on Monday on report that Iran is hesitant to take part in any deal forcing it to limit production, as the Persian Gulf nation returns to global markets for the first time in nearly a decade. Also, BNP Paribas came up with a bearish note the increased likelihood that oil could retest yearly lows amid signals of mounting stockpiles worldwide. Benchmark crude oil futures for May delivery plunged by $1.06 or 2.88 percent to $35.59 a barrel after trading in a range of $35.59 and $37.20 a barrel on the New York Mercantile Exchange. In London, Brent crude for June delivery closed at $37.76, down $0.91or 2.35 percent on the ICE.

Indian rupee appreciating for sixth straight session ended stronger against dollar on Monday due to persistent selling of American currency by banks and exporters. Besides, gains in equity markets also buttress the domestic currency. Meanwhile investors turned optimistic on the hopes that Reserve Bank of India (RBI) will cut rates in its monetary policy review. The RBI will announce its bi-monthly policy on April 05 2016 after 11 am. Further, sentiment got some support with the Nikkei purchasing managers' index (PMI) survey which showed that the India's manufacturing growth is at an eight month high of 52.4 in March after the 51.1 points reading in February. On the global front, dollar slipped against the yen, despite a survey on Monday showing Japanese companies' long-term inflation expectations weakened in March. Finally, the rupee ended at 66.20, 5 paise stronger from its previous close of 66.25 on Thursday.

The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 15151.99 crore against gross selling of Rs 10642.79 crore, while in the debt segment, the gross purchase was of Rs 3731.75 crore with gross sales of Rs 447.70 crore.         

The US markets made a weaker closing in last session amid mounting speculation the Federal Reserve will raise interest rates before summer. The sentiments were also weighed down by a US Department of Commerce report that factory orders fell 1.7 percent in February. The Asian markets have made a weak start with some of the indices trading lower by over one percent, led by the Japanese market which is down by over two percent, as the oil declined for a third day, while the yen gained. Indian markets in hope of a rate cut gained some momentum in the final hours of last trading session and ended with decent gains. Today, the start of the important day is likely to be soft, tailing the feeble global cues and traders will be eyeing the Reserve Bank of India's (RBI) first bimonthly monetary policy announcement for the fiscal. RBI is expected to cut its policy interest rate by a quarter percentage point, lowering it to a more than five-year low. The central bank may also announce that it is retaining its 'accommodative' stance, raising the prospect of another 25 bps rate cut later this year. Traders are likely to get some support with statement of Economic Affair Secretary Shaktikanta Das, who expecting an early passage of GST bill by Parliament has said that administrative machinery is ready to implement the new indirect tax regime, which will be a key component in improving ease of doing business. Meanwhile, the government has said that it is keen to sign the free trade pact with the 28-nation bloc at the earliest and will soon approach the authority for a meeting of chief negotiators. There will be some buzz in the PSU stocks, as the Finance Ministry has made a list of 16 PSUs, including ONGC, Oil India and Coal India for achieving its disinvestment target of Rs 40,000 crore in FY17. There will be some buzz in the PSU oil marketing companies, as petrol price has been hiked by Rs 2.19 a litre and diesel by 98 paise per litre.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Bajaj Auto has registered rise of 22% in total sales to 305,800 units in March 2016 against 250,604 units in March 2015.
• Wipro, the country's major software services firm, is eyeing to set up a BPO centre in Riyadh, Saudi Arabia.
• Coal India's Jharkhand arm Central Coalfields posted a record production of 61.35 million tonnes in 2015-16.
• Mahindra & Mahindra has launched its latest SUV - the NuvoSport, giving a further boost to its leadership position in the UV segment.
• Hero MotoCorp has sold 606,542 units in the month of March 2016, registering a growth of 14% over the corresponding month last year.