Indian equity benchmarks slipped from day's high but still ended in the positive territory on Monday on the back of positive global cues, encouraging quarterly numbers by select pharma companies. Markets started this week's trading with gains of around a percent each, as traders took encouragement with Niti Aayog CEO Amitabh Kant's statement that India's FDI regime is the most liberal in the world, and even during the COVID-19 pandemic, the country has attracted over $22 billion worth of direct investments. Sentiments also got boost after Prime Minister Narendra Modi launched financing facility of Rs 1 lakh crore under the Agri-Infra Fund that will help create post-harvest infrastructure in villages and generate jobs. Adding the optimism among investors, Union minister Nitin Gadkari has urged the industry to identify the sectors heavily reliant on imports, particularly from China, and look for substitutes towards indigenous production to make India a super power. Domestic markets maintained their upward momentum in the afternoon session, with Commerce and Industry Minister Piyush Goyal's statement that the world is looking for trusted partners where there is rule of law, transparency in systems, strong judiciary and democratic traditions, and India can become a key player in global supply chains as it provides all of these. He said India has to engage with the world with competitive prices, high-quality products, large scale economies of manufacturing, high productivity levels, but not on the crutches of government subsidies. However, markets trimmed most of their initial gains to come off day's high in late afternoon session, despite Crisil Ratings' report stated that one-time restructuring of corporate loans, which are facing stress due to coronavirus-induced disruptions, announced by the Reserve Bank of India (RBI) is likely to ease liquidity pressure for companies. Finally, the BSE Sensex gained 141.51 points or 0.37% to 38,182.08, while the CNX Nifty was up by 56.10 points or 0.50% to 11,270.15.

The US markets ended mostly higher on Monday after President Donald Trump signed executive orders aimed at extending coronavirus relief to Americans. The executive orders include an extension of expanded unemployment benefits, a deferral of student loan payments through 2020, a federal moratorium on evictions and a payroll tax holiday. Trump signed the orders as lawmakers continue to struggle to reach an agreement on a new coronavirus relief package. However, the orders are likely to face legal challenges, as Congress controls the funding needed to continue the programs. Meanwhile, US-China tensions intensified, with Beijing announcing unspecified sanctions against 11 US politicians and heads of organizations promoting democratic causes, including additional measures targeting Sens. Marco Rubio and Ted Cruz, who already were subject to a travel ban. Though, airline stocks showed a substantial move to the upside on the day, driving the NYSE Arca Airline Index up by 5 percent. The rally by airline stocks came as federal data showed the number of people passing through Transportation Security Administration checkpoints at US airports rose to the highest level since March 17 on Sunday.

Crude oil futures ended higher on Monday as optimism about energy demand rose a bit after somewhat encouraging factory data from China, and hopes about coronavirus-related stimulus in the US. Meanwhile, Saudi Arabian Aramco Chief Executive Nasser said the company has seen signs of a recovery in global oil demand as economies gradually open up. Nasser added crude consumption in Asia is almost back to pre-Covid-19 levels. Crude oil futures for September surged 72 cents or 1.8 percent to settle at $41.94 a barrel on the New York Mercantile Exchange. October Brent crude rose 59 cents or 1.3 percent to settle at $44.99 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally higher against dollar on Monday as banks and exporters continued to sell the US currency amid persistent capital inflows. This is the second consecutive session when the rupee is traded higher against dollar. Sentiments remained optimistic as overseas investors remained net buyers in Indian markets by investing a net Rs 8,327 crore in the first week of August amid better than expected results by big Indian companies. Foreign portfolio investors (FPI) invested a net Rs 7,842 crore in equities and Rs 485 crore in the debt segment between August 3-6. Support also came in as Niti Aayog CEO Amitabh Kant said that the India's FDI regime is the most liberal in the world, and even during the COVID-19 pandemic, the country has attracted over $22 billion worth of direct investments. On the global front; dollar rose on Monday, including versus the euro and Swiss franc, with investors focusing on fiscal stimulus in the United States and U.S.-China tensions ahead of key trade talks on August 15. Finally, the rupee ended at 74.90, 3 paise stronger from its previous close of 74.93 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 6499.43 crore against gross selling of Rs 5192.95 crore, while in the debt segment, the gross purchase was of Rs 2060.95 crore with gross sales of Rs 1167.75 crore. Besides, in the hybrid segment, the gross buying was of Rs 552.33 crore against gross selling of Rs 476.54 crore.

The US markets ended mostly higher on Monday as investors extended a rotation into value stocks from heavyweight tech-related names while awaiting news on progress in a US fiscal support bill. Asian markets are trading in green on Tuesday as New York, California and Texas reported a drop in coronavirus hospitalizations and investors assessed the progress in US stimulus talks between Democrats and Republicans. Indian markets ended higher on Monday contributed by the gains in pharma, auto and financial stocks. Today, the start of session is likely to be positive following firm trade in Asian peers. Investors are eyeing the industrial output data for June scheduled to be released later in the day. Traders will be getting encouragement with Commerce and Industry Minister Piyush Goyal's statement that India's balance of payments this year is going to be very, very strong on the back of significant improvement in exports and a fall in imports. Some support will come in with report that India's recovery rate from Covid-19 improving. India recorded 54,859 recoveries on August 10, the highest till date. Daily new recoveries have grown to the range of 40,000 to 50,000 in a day, much higher than the previous month's range of 20,000 to 40,000 a day. Besides, Union Minister Nitin Gadkari said the government is working on the idea of a land bank and a social microfinance institution to help people run small shops and businesses. Though, traders may be concerned with private report that on August 10, India reported over 1,000 fatalities for the second time. Daily new deaths have been consistently on the rise. There may be some cautiousness with ratings agency ICRA's report that the coronavirus pandemic will significantly impact performance of companies and it is likely to be severe and prolonged for select sectors, especially aviation, hospitality and retail. It added the pandemic, followed by extended lockdowns in India both nationally and then localised, has impacted India Inc for the major part of the first quarter of the current financial year. Meanwhile, the commerce ministry's investigation arm DGTR has recommended imposition of provisional anti-dumping duty on PET resin chemical from China to guard domestic players from cheap imports. Auto stocks will be in focus with data from The Federation of Automobile Dealers Associations (FADA) showing that total auto vehicle registrations dropped by 36.27 per cent to 1,142,633 units from 1,792,879 units, a year ago. There may be some reaction in defence stocks with Defence Minister Rajnath Singh's statement that the government will unveil more steps to attract investment in defence manufacturing so that India can produce world-class military platforms and weapons systems. There will be some earnings announcements too to keep the markets buzzing.

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

Nifty Top volumes

• Tata Motors has launched a range of health and hygiene accessories for its customers. 
• ONGC has cut its debt by more than one-third but faces an uphill challenge to meeting planned expenditure during FY21. 
• UltraTech Cement is expecting a subdued performance in the wake of weak real estate and overall slowdown in the economy coupled with the impact of the coronavirus pandemic. 
• Coal India has revised its production target to 650-660 million tonne for 2020-21 fiscal in the wake of disruptions caused by the COVID-19 pandemic.