Extending northward journey for fourth straight session, Indian equity benchmarks ended Monday's session with healthy gains of over two and half percent, as the country geared up to further open its economy after a months-long lockdown to curb the spread of the coronavirus pandemic. Sensex and Nifty closed above their crucial 33,300 and 9,800 levels, respectively. Key indices made gap-up opening, tracking positive cues from the Asian peers. Sentiments remained up-beat with Commerce minister Piyush Goyal's statement that most startups will be eligible for additional liquidity and funding under the credit and funding support announced for MSMEs under the Aatmanirbhar Bharat Abhiyan package. Key indices extended their upside in afternoon session, taking support from report that the Department for Promotion of Industry and Internal Trade (DPIIT) will very soon put a draft ecommerce policy in the public domain to seek views and comments. It said the ecommerce is a fast emerging sector and it is difficult to predict where it will go in the next couple of years. However, markets trimmed some of their initial gains in late hour of trade, as some anxiety remained among traders with the National Statistical Office (NSO) data showing that India's economic growth slipped to 3.1% in the January-March quarter of 2019-20 compared to growth of 5.7% in the corresponding quarter of 2018-19 showing impact of COVID-19 pandemic. In 2019-20, the Indian economy grew by 4.2% against 6.1% expansion in 2018-19. Also, the output of eight core infrastructure industries plunged by a record 38.1% in April as the nationwide lockdown to contain coronavirus pandemic caused a substantial loss of production across sectors. Finally, the BSE Sensex gained 879.42 points or 2.71% to 33,303.52, while the CNX Nifty was up by 245.85 points or 2.57% to 9,826.15.

The US markets ended higher on Monday, on hopes that the worst of the economic damage inflicted by the COVID-19 pandemic may have passed, even as states deployed National Guard units to major US cities to help quell civil unrest. All 50 states have embarked on some stage of reopening from forced shutdowns due to the pandemic. The strength on markets came following the release of a report from the Institute for Supply Management (ISM) showing US manufacturing activity contracted at a slower rate in the month of May. The ISM said its Purchasing Managers Index rose to 43.1 in May from 41.5 in April, coming in just below street estimates for a reading of 43.6. While the index rebounded from its lowest level since April of 2009, a reading below 50 still indicates a contraction in manufacturing activity. Nonetheless, Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, said the latest figure indicates expansion in the overall economy after April's contraction. Meanwhile, a report released by the Commerce Department showed a sharp pullback in US construction spending in the month of April, the decrease was much smaller than street had expected. The Commerce Department said construction spending tumbled by 2.9 percent to an annual rate of $1.346 trillion in April after inching up by less than a tenth of a percent to a revised $1.387 trillion in March. Street had expected construction spending to show an even more substantial 6.5 percent nosedive following the 0.9 percent increase originally reported for the previous month. The steep drop in total construction spending reflected significant decreases in spending on both private and public construction.

Crude oil futures ended marginally lower on Monday as Beijing-Washington tensions raised concerns over the prospects for crude demand. Beijing has warned Washington of retaliation after US President Donald Trump announced that the United States would ban some Chinese graduate students and start reversing Hong Kong's special status in customs and other areas. However, Brent crude oil prices finished higher on the heels of a report that major oil producers may meet earlier than previously planned, and discuss an extension to current crude output cuts. Crude oil futures for July lost 5 cents or 0.1 percent to settle at $35.44 a barrel on the New York Mercantile Exchange. However, August Brent crude added 48 cents or 1.3 percent to settle at $38.32 a barrel on London's Intercontinental Exchange.

Indian rupee has lost most of the gains but still managed to end marginally higher against dollar on Monday, on persistent selling of the American currency by exporters. Traders took some support with Commerce minister Piyush Goyal's statement that most startups will be eligible for additional liquidity and funding under the credit and funding support announced for MSMEs under the Aatmanirbhar Bharat Abhiyan package. Weak American currency and strong domestic equity markets also supported the local unit.  However, gains remain capped as the ministry of Commerce and Industry in its latest data has showed that the growth of eight core infrastructure industries have plunged by a record 38.1 percent in April 2020 as compared to same period of last year, as the nationwide lockdown to contain coronavirus pandemic caused a substantial loss of production across sectors. On the global front, dollar slipped on Monday as investors looked past unrest in the United States to the global economic recovery from the coronavirus and hoped for an easing in Sino-U.S. tensions. Finally, the rupee ended at 75.54, 8 paise stronger from its previous close of 75.62 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 25171.78 crore against gross selling of Rs 23967.09 crore, while in the debt segment, the gross purchase was of Rs 1100.89 crore with gross sales of Rs 955.01 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.09 crore against gross selling of Rs 3.24 crore.

The US markets ended higher on Monday as investors' hopes for a swift economic rebound offset nationwide protests and escalating tensions between the US and China. Asian markets are trading mostly in green on Tuesday following the positive cues overnight from Wall Street. Indian markets ended higher on Monday and extended their gains for the fourth straight session, as firm global cues as well as enthusiasm over easing of lockdown curbs helped investors shrug off weak GDP data. Today, the markets are likely to make a cautious start amid rising coronavirus cases in India. The country's total number of coronavirus cases is nearing the 200,000 mark, even as the country is in the midst of a watered-down Lockdown 5.0, or so-called India Unlock 1.0. Traders will be concerned as Moody's Investors Service (Moody's) downgraded the Government of India's foreign-currency and local-currency long-term issuer ratings to Baa3 from Baa2. The rating agency has also downgraded India's local-currency senior unsecured rating to Baa3 from Baa2, and its short-term local currency rating to P-3 from P-2. The outlook remains negative. There will be some cautiousness with the Centre for Monitoring Indian Economy (CMIE) data showing that India's unemployment rate in May rose to 23.48 per cent, marginally lower from 23.52% in April, reflecting the impact of coronavirus pandemic. Though, some support may come later in the day with the India Meteorological Department's (IMD) statement that the Southwest monsoon arrived in India on June 01 with heavy rainfall over several places in Kerala, marking the commencement of the four-month long rainfall season. It also upgraded its forecast for 2020 rainfall to 102% of the Long Period Average (LPA), from the 100% in April. The forecast is with a model error of plus and minus of 4%. Meanwhile, the GST Council in its next meeting will discuss waiver of late fee for non-filing of GST returns for August 2017 to January 2020 period. Besides, the Union Cabinet approved an increase in minimum support prices (MSP) of 14 Kharif crops. There will be some buzz in the MSMEs stocks with report that in order to support stressed micro, small and medium enterprises (MSMEs), the Centre rolled out a Rs 20,000 crore distressed asset fund to extend support to promoters of distress units. Non-banking finance companies (NBFC) stocks will be in focus Moody's report that the Reserve Bank of India's decision to extend the moratorium on loan repayment by three more months will be credit negative for NBFC.

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

Nifty Top volumes

• Dr. Reddy's Laboratories has received the EIR from the US Food and Drug Administration for API Srikakulam Plant (SEZ), Andhra Pradesh. 
• L&T's construction arm -- L&T Construction has transformed established or under-construction healthcare units into COVID-19 care facilities across India. 
• APSEZ has raised Rs 100 crore by allotment of 1,000 Rated, Listed, Secured, Redeemable, NCDs of the face value of Rs 10 lakh each on private placement basis. 
• Maruti Suzuki India has posted total sales of 18,539 units in May 2020, including 13,865 units in Domestic market and sales of 23 units to other OEM.