Extending their losing streak for fifth straight day, Indian equity benchmarks ended the Monday's trade with a cut of over half a percent, with frontline gauges ending below their crucial 34,700 (Sensex) and 10,550 (Nifty) levels, as Karnataka elections is weighing on the markets as the outlook of the 2019 election is looking obfuscate. Markets started the session slightly in green as traders took some support with economic affairs secretary Subhash Chandra Garg's statement that India's growth trajectory continues to be stable with strong macroeconomic fundamentals, despite a continual rise in global oil prices and hardening bond yields. He also said that the fiscal deficit programme has been going on very smoothly and there has been no reason to believe that there will be any greater impact. Traders also got some support with report that India is the sixth wealthiest country in the world with a total wealth of $8,230 billion, while the US is the richest nation globally. However, markets failed to hold on to the green terrain and slipped into red on report that even as monsoon is predicted to be normal this year, its uneven distribution could spike food prices, and inflation is likely to edge further. Sentiments also remained dampened with a private report stating that Corporate India, especially the chunk comprising over-leveraged companies, is worried about a recent Reserve Bank of India (RBI) circular that says companies with even a day of loan-default can be set on the path of debt resolution and subsequent bankruptcy proceedings. Markets extended losses to end near intraday lows with the Comptroller and Auditor General (CAG) of India Rajiv Mehrishi's statement that the root cause of Indian banking sector crisis is the problem in the bond market as the RBI acts as regulator as well as trader. He noted that the RBI, in its effort to ensure that banks don't fail, has slowed down giving licences to new banks, so it promotes uncompetitive behavior. Finally, the BSE Sensex declined 232.17 points or 0.67% to 34,616.13, while the CNX Nifty was down by 79.70 points or 0.75% to 10,516.70.

The US markets ended higher on Monday with the Dow industrials climbing back to above 25,000, marking its highest close since March 12 and the S&P 500 finishing at a roughly nine-week high as investors cheered easing trade tension between the U.S. and China. The sentiments remained upbeat after Treasury Secretary Steven Mnuchin said over the weekend that the Trump administration would delay implementation of tariffs on Chinese goods and put the trade war on hold while working out details of a deal between the countries. Though, a conflicting statement was released by U.S. Trade Representative Robert Lighthizer, who said Washington may still resort to tariffs. But, Mnuchin insisted that the administration is unified after agreeing over the weekend not to impose tariffs on China. At the end of trade negotiations this weekend, China agreed to buy larger amounts of U.S. goods to help narrow the trade deficit between the two economies, but didn't agree to the specific U.S. target of $200 billion. In addition, traders remained watchful ahead of events including, releases of the latest meeting minutes from both the Federal Reserve and European Central Bank, a slew of debt sales from the U.S. and preliminary purchasing manager indexes from the euro zone. The Nasdaq surged 39.70 points or 0.54 percent to 7,394.04, the S&P 500 jumped 20.04 points or 0.74 percent to 2,733.01 and the Dow Jones Industrial Average was up by 298.20 points or 1.21% to 25,013.29.

Crude oil futures settled at a fresh three-and-half-year high on Monday as geopolitical uncertainty rose after weekend elections in Venezuela viewed as illegitimate raised the prospect of US sanctions on the country's exports. Besides, gains in US markets also supported the prices. Moreover, Venezuela's socialist President Nicholas Maduro faced widespread international condemnation on Monday after his re-election in a weekend vote his critics denounced as a farce cementing autocracy in the crisis-stricken oil producer. Benchmark crude oil futures for June delivery climbed 96 cents or 1.40 percent to settle at $72.24 a barrel on the New York Mercantile Exchange. July Brent crude rose 71 cents or 0.90 percent to settle at $79.22 a barrel on London's Intercontinental Exchange.

Taking the losses further for the second day, Indian rupee ended weaker against the dollar on Monday, on continued demand for the American unit coupled with its growing strength overseas. Traders remained concerned with report stating that even as monsoon is predicted to be normal this year, its uneven distribution could spike food prices, and inflation is likely to edge further. Besides, heavy losses in domestic equity markets also weighed on the sentiments of the local currency. However, losses remained capped as traders took some relief with economic affairs secretary Subhash Chandra Garg's statement that India's growth trajectory continues to be stable with strong macroeconomic fundamentals, despite a continual rise in global oil prices and hardening bond yields. He also said that the fiscal deficit programme has been going on very smoothly and there has been no reason to believe that there will be any greater impact. On the global front, Sterling fell to its lowest in nearly five months on Monday as the dollar surged and investors prepared for data that could determine whether the Bank of England raises interest rates this year. Finally, the rupee ended at 68.12, 12 paise weaker from its previous close of 68.00 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 5556.23 crore against gross selling of Rs 5831.95 crore, while in the debt segment, the gross purchase was of Rs 987.01 crore with gross sales of Rs 2667.15 crore. Besides in the hybrid segment, the gross buying was of Rs 0.10 crore against gross selling of Rs 2.29 crore.

The US markets ended higher on Monday amid optimism about a positive outcome from trade talks between the U.S. and China. However, Asian stocks are trading mostly lower in thin trade amid holidays in Hong Kong and South Korea. The dollar hovered near four-month highs on renewed optimism about global growth while oil prices held steady after hitting their highest levels in three and a half years overnight on concerns over U.S. sanctions targeting Venezuela. Indian equity benchmarks ended lower on Monday as concerns over rising oil prices, a fractured mandate in Karnataka and renewed selling by foreign funds. Today, the markets are likely to make cautious start amid weak cues from Asian counters. Traders will remain concern on report that rising oil prices may not prompt the RBI Governor-headed Monetary Policy Committee (MPC) to go for a rate hike in its June meeting but it can widen the Current Account Deficit (CAD) to 2.5 per cent of the Gross Domestic Product (GDP). However, traders will get some relief later in the day with ICRA's report that GDP growth in January-March 2017-18 at 7.4 per cent on account of good rabi crop harvest and improved corporate earnings, up from 7.2 per cent in the third quarter. The Central Statistics Office (CSO) is scheduled to come out with GDP estimate for the fourth quarter (Q4) of fiscal 2017-18 and provisional annual estimates for the year 2017-18 on May 31. Some support may come with NITI Aayog's vice-chairman Rajiv Kumar exuding confidence that Indian economy will achieve 9 per cent growth rate on sustained basis by 2022 on the back of reforms like GST, demonetisation and the Insolvency and Bankruptcy Code (IBC). There will be buzz in Gems and jewellery related stocks on report that India's gems and jewellery exports have declined 22 per cent to $2.6 billion in April on account of demand slowdown in major markets including the UAE.

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

Nifty Top volumes

• Tata Steel's wholly-owned subsidiary -- Bamnipal Steel has successfully completed the acquisition of controlling stake of 72.65% in Bhushan Steel. 
• Reliance Industries has received environment clearance for the expansion and optimisation of its petrochemical complex at Maharashtra at an estimated cost of Rs 2,338 crore. 
• Bajaj Auto is planning to invest up to Rs 300 crore in this fiscal, towards new launches and Research and Development. 
• L&T's wholly owned subsidiary -- LTHE in consortium with TechnipFMC has won two significant orders from HURL, a joint venture company of IOCL, NTPC, CIL, FCIL and HFCL.