Indian stock markets witnessed a fairly stable day of trade on Monday as sanguinity got reinforced after consumer inflation in April eased to its lowest in at least five years, reviving a debate on whether the central bank should cut interest rates. Hopes for further easing of inflation got a boost with the India Meteorological Department (IMD) stating that monsoon rains had reached the country's Andaman and Nicobar islands ahead of the schedule. Meanwhile, Consumer Price Index (CPI)-based inflation eased to 2.99% in April, from 3.89% in March, due to lower cost of food items. Also, the inflation based on the wholesale price index (WPI) slipped to a four-month low of 3.85% in April as both food articles and manufactured items showed cooling in prices. The street shrugged off industrial output growth data which slipped to 2.7% in March compared to 5.5% in March 2016, mainly on account of poor performance of manufacturing sector. Adding the optimism among market participants, the private report indicated that trustees of retirement fund body EPFO are likely to raise the investment limit in exchange traded funds (ETFs) to 15% of the investible deposits, from 10% at present, in the current fiscal. The higher limit would help the Employees' Provident Fund Organisation's (EPFO) park around Rs 15,000 crore in stock markets in 2017-18 as its investible deposits are close to Rs 1 lakh crore annually. Some support also came with the report that Private equity investments saw a significant upturn in April with deals worth $ 3.16 billion, up 69 per cent from a year ago, due to big ticket transactions. Finally, the BSE Sensex gained 133 points or 0.44% to 30322.12, while the CNX Nifty was up by 44.50 points or 0.47% to 9,445.40.

The US markets closed higher on Monday, as a jump in oil prices to a two-week high lifted Wall Street sentiment. Crude oil prices settled higher after energy ministers from Saudi Arabia and Russia said in a joint statement that they endorse a nine-month extension to current production cuts - three months longer than expected. The proposed extension still needs to be confirmed when the 13 members of the Organization of the Petroleum Exporting Countries gather for a closely watched meeting in Vienna on May 25. Back home, about 75 percent of S&P 500 companies that have reported quarterly results so far have beaten Wall Street expectations. On the domestic economy front, sentiment among home builders rebounded in May, buoyed by optimistic views of demand for housing. The monthly confidence gauge from the National Association of Home Builders rose 2 points to 70, the second-highest level since the downturn. The index soared after the November election, as builders bet on more industry-friendly policies from Washington, but stumbled after initial steps from the Trump administration, like a tariff on lumber. The Dow Jones Industrial Average added 85.33 points or 0.41 percent to 20,981.94, Nasdaq gained 28.44 points or 0.46 percent to 6,149.67, while S&P 500 edged higher by 11.42 points or 0.48 percent to 2,402.32.

Crude oil futures bounced back on Monday and surged by over 2 percent after Russia and Saudi Arabia vowed to do whatever it takes to re-balance oil markets. They said they would support an extension of the supply-cut agreement into March 2018. Russian President Vladimir Putin reportedly said that he met the managers of all the main oil and gas companies in the country, and the minister of energy, behind closed doors and we discussed the issue and we support this proposal.  Benchmark crude oil futures for June delivery ended higher by $1.01 or 2.1 percent to $48.85 on the New York Mercantile Exchange. In London, Brent crude for July delivery ended up by 2.44 percent to $51.84 on the ICE.

Indian rupee ended upbeat for third consecutive session on Monday, fuelled by positive economic data. The wholesale price index (WPI) for the month of April eased to a four-month low of 3.85% after the government revised the base year for the indices in the new series to 2011-12, against the earlier 2004-05. The consumer price index (CPI) inflation also softened to 2.99% in the first month of the new financial year compared with 3.89% in March and 5.47% in the year earlier. Besides, positive momentum in the domestic equities and continuous foreign capital inflows too kept the domestic unit in good spirits. On the global front, dollar was slightly lower against a basket of major currencies after US economic data came in shy of expectations and another missile test by North Korea over the weekend underpinned the perceived safe-haven yen. Finally, the rupee ended at 64.06, 25 paise stronger from its previous close of 64.31 on Friday.

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 4782.52 crore against gross selling of Rs 3866.47 crore, while in the debt segment, the gross purchase was of Rs 2347.51 crore with gross sales of Rs 503.00 crore.

The US markets ended higher in the last session and the tech-heavy Nasdaq and the S&P 500 once again climbed to new record closing highs, as rise in crude oil generated some buying interest, while report showed homebuilder confidence unexpectedly improved in the month of May. The Asian markets have made a mixed start and some indices extended gains after a surge in oil and weakness in dollar. Though, the Chinese market was in red on weaker industrial production and retail data. The Indian markets in a steady day of trade managed gains of around half a percent in last session. Decline in inflation raised hopes of rate cut by the RBI and propelled the markets to fresh all time highs. Today, the start is likely to be in green and traders will be getting some encouragement with report that India's exports grew by 19.8% to $24.6 billion in April, backed by strong performance from petroleum, engineering and textiles sectors. Though, trade deficit also witnessed about threefold increase to $13.2 billion, due to goods imports in April recording a historic 49.07% year-on-year growth to $37.9 billion - following a surge in gold, oil, coal, chemicals, pearls and precious stones, machinery, transport equipment and electronics imports. Meanwhile, chief statistician TCA Anant has said that India's growth numbers to be released later this month will include the impact of new data series for industrial output and wholesale price inflation. There will be some buzz in the defence related stocks, as the government is now getting set to clear the much-awaited 'strategic partnership' policy to boost the private sector's role in defence production. The banking stocks too will continue to remain in action, as after PSU lender SBI, private sector lenders ICICI Bank and HDFC too have reduced home loan rates in the affordable segment. There will be some important earnings announcements too, to keep the markets buzzing.

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

Nifty Top volumes

• Axis Bank is planning to expand its business of distributing life insurance policies through a tie-up with one more insurer.
• Tata Power Delhi Distribution, a JV of Tata Power and the Government of Delhi, has inducted 42 electric scooters, 8 e-rickshaws and 3 compact CNG tower wagons in its maintenance fleet.
• Tata Motors has increased price of its cars in range of Rs 5000 to Rs 17000.
• ICICI Bank has slashed interest rates by up to 30 basis points for borrowers availing home loans up to Rs30 lakh.