Indian equity benchmarks rallied for second session in a row on Monday wherein the Sensex rose as much as 592 points and Nifty 50 index moved above its important psychological level of 11,200, lifted by across-the-board gain amid positive cues from global markets. Domestic equities traded on a positive note since beginning, as traders took support with report that the Finance Ministry is likely to provide capital support from the Rs 20,000 crore fund approved by Parliament in recently concluded session to some Public Sector Banks (PSBs) in the third quarter (Q3) itself. Parliament approved Rs 20,000 crore for PSB capital infusion as part of the first batch of Supplementary Demands for Grants for 2020-21 which sought additional spending of a record Rs 2.35 trillion primarily to meet expenses for combating the Covid-19 pandemic. Some support also came in with the RBI data showing that bank credit grew 5.26 per cent to Rs 102.24 lakh crore while deposits rose 11.98 per cent to Rs 142.48 lakh crore in the fortnight ended September 11. Trading sentiments remained optimistic as union Minister Pratap Chandra Sarangi has called for efforts by the local industry to capture the country's huge domestic market, in line with Prime Minister Narendra Modi's vision of Aatmanirbhar Bharat or a self-reliant India. Traders overlooked S&P's statement that India's economy may experience a record contraction in the current financial year mainly due to the global COVID-19 pandemic, and the real GDP growth is expected to recover from next fiscal onwards. The agency also affirmed its BBB- long-term and A-3 short-term foreign and local currency sovereign credit ratings on India. Market participants paid no heed towards Economic think-tank NCAER's quarterly review of the economy stated that India's gross domestic product (GDP) growth is likely to decline by 12.6 percent during the current financial year (FY21) on account of the impact of the coronavirus pandemic on the business activities. Finally, the BSE Sensex rose 592.97 points or 1.59% to 37,981.63, while the CNX Nifty was up by 177.30 points or 1.60% to 11,227.55.

The US markets ended higher on Monday, extending the strong upward move seen in the previous session, following a rally seen in the European markets, as traders picked up stocks at relatively reduced levels. Traders seemed to shrug off recent concerns about a surge in coronavirus cases and uncertainty about the US presidential election.  The markets have also benefitted from optimism about a new coronavirus bill after House Speaker Nancy Pelolsi said a new package is still possible. House Democrats plan to unveil a new $2.4 trillion coronavirus relief bill. The price tag for the bill is $1 trillion less than a stimulus package the House passed back in May but may still be too high for Republicans. Housing stocks showed a substantial move to the upside on the day, driving the Philadelphia Housing Sector Index up by 3.7 percent. On the economic front, Cleveland Federal Reserve Bank President Loretta Mester warned that the US economy remained fragile and will not fully recover until actions are taken to promote a more inclusive economy.

Crude oil futures ended higher on Monday recouping some of last week's losses, but concerns that the rise in coronavirus cases throughout the globe will lead to weaker energy demand has grown. However, contributing to support to oil prices was a possible disruption to oil output in Norway. The Norwegian Oil and Gas Association said oil firms in Norway plan to close down 22% of the country's oil-and-gas output, or 900,000 barrels of oil equivalent per day, if oil workers go on strike. Crude oil futures for November rose 35 cents or 0.9 percent to settle at $40.60 a barrel on the New York Mercantile Exchange. November Brent crude gained 51 cents or 1.2 percent to settle at $42.43 a barrel on London's Intercontinental Exchange.

Indian rupee ends considerably lower against dollar on Monday on emergence of demand for the greenback from importers. Sentiments were downbeat as Global rating agency S&P in its latest report stated that the India's economy is likely to experience a record contraction in the current financial year (FY21) mainly due to the global Covid-19 pandemic, and the real GDP growth is expected to recover from next fiscal onwards. Meanwhile, Reserve Bank of India (RBI) in its latest data has showed that bank credit rose by 5.26 percent to Rs 102.24 lakh crore, while deposits grew by 11.98 percent to Rs 142.48 lakh crore in the fortnight ended September 11. On the global front; Sterling traders not panicked yet by new Brexit brinkmanship. Britain may be heading for a no-deal Brexit in three months, but among traders in London the feeling so far is one of deja vu rather than a panicky rush to dump UK assets. Finally, the rupee ended at 73.79, 17 paise weaker from its previous close of 73.61 on Friday.

The FIIs as per Monday's data were net seller in equity segment, while net buyer in debt segment. In equity segment, the gross buying was of Rs 4555.98 crore against gross selling of Rs 7781.09 crore, while in the debt segment, the gross purchase was of Rs 882.78 crore with gross sales of Rs 359.60 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.89 crore against gross selling of Rs 8.08 crore.

The US markets closed sharply higher on Monday as investors sought bargains among sectors hardest-hit by the coronavirus recession, now limping toward its ninth month. Asian markets are trading mostly in green on Tuesday amid logistics firm ZTO Express soared in its Hong Kong debut. Indian markets ended considerably higher on Monday on account of healthy buying in banking and auto stocks supported the indices amid positive trend in the global markets. Today, the start of session is likely to be flat-to-positive taking lead from Asian peers and notable gains on Wall Street overnight. Traders will be taking some encouragement as the Reserve Bank has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021, amid the ongoing economic woes created by the coronavirus pandemic. However, there may be some cautiousness with report that the Reserve Bank has postponed the meeting of the Monetary Policy Committee (MPC), the all-important interest rate-setting panel, over a possible lack of quorum as the appointment of independent members is delayed. Market participants may be concerned as ratings agency ICRA revised its forecast for the contraction in India's FY21 GDP to 11 per cent from its earlier assessment of 9.5 per cent. The ratings agency cited the elevated levels of Covid-19 infections at the end of Q2FY21. Meanwhile, seeking to make fund-raising easier, markets regulator Sebi has provided relaxations to REITs and InvITs for preferential and institutional placement of their respective units. Defence stocks will be in focus after the government yesterday unveiled a new Defence Acquisition Procedure with a focus on significantly boosting indigenous production. Under the new policy, the offset guidelines have also been revised facilitating preference to defence majors offering to manufacture products in India over relevant components. Besides, three IPOs to hit primary market today. Likhitha Infrastructure, the Hyderabad-headquartered oil and gas pipeline infrastructure service provider, will hit the market with its Rs 61.20 crore IPO. Mazagon Dock Shipbuilders, the only firm in India that makes destroyers and submarines for the Indian Navy, will hit the primary market. UTI Asset Management Company (AMC), the second-largest asset management company in terms of total AUM and eighth-largest AMC in quarterly AUM, is also set to hit the primary market.

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

Nifty Top volumes

• Dr. Reddy's Laboratories has launched Dimethyl Fumarate Delayed-Release Capsules approved by the USFDA. 
• Sun Pharmaceutical Industries is looking to expand its specialty business across different regions like Greater China and Japan after having established presence in the US market. 
• SBI is considering proposal for raising of additional AT1 Bonds to the extent of Rs 5,000 crore by way of issuance of Basel III compliant debt instruments in rupees. 
• BPCL has paid for its defaulting partner Videocon Industries after it had relied on a rarely used model to acquire stake in five oil blocks in Brazil.