Key Indian equity benchmarks fell hard on Monday to settle the day in red terrain, with Sensex and Nifty losing around 200 and 100 points, respectively. Key indices started on cautious note, amid reports that overseas investors have pressed the exit button in July and pulled out a net Rs 3,758 crore from the Indian capital markets on account of multiple headwinds, including the super-rich tax announced in Budget 2019-20. Domestic sentiments remained downbeat, as the government admitted that doubling of farm income by 2022 was not possible with the current rate of growth in the agriculture sector and said it was trying to promote allied sectors to achieve the target. Markets remained lackluster throughout the trading session, impacted with a report stating that midway into earnings season, it is clear that India Inc.'s P&L account remains under pressure. Revenue growth is so sluggish that even a modest increase in costs has not helped companies protect their margins. Market participants overlooked reports stating that India's chief economic advisor to the Union finance minister Krishnamurthy Subramanian exuded confidence in the economy swelling to a $5-trillion giant by 2025, saying the high target is definitely achievable. Finally, the BSE Sensex fell 196.42 points or 0.52% to 37,686.37, while the CNX Nifty was down by 95.10 points or 0.84% to 11,189.20.

The US markets ended mostly in red on Monday as traders looked ahead to the Fed announcement, with the central bank widely expected to cut rates by at least 25 basis points. The Fed decision will be followed by a key report on employment that could also offer further guidance on the state of the labor market and the domestic economy. The US economy is experiencing its longest expansion in history, but the Fed is expected to cut rates in a proactive move aimed at offsetting the negative effects of the US-China trade war. President Donald Trump has repeatedly urged the Fed to lower rates. Assuming the Fed cuts rates as expected, traders are likely to pay close attention to the accompanying statement for clues about the potential for future rate cuts. Besides, face-to-face trade talks between China and US officials are set to resume Tuesday in Shanghai, marking the first such meeting on tariffs since President Donald Trump and China's President Xi Jinping met on the sidelines of the Group of 20 gathering in Osaka, Japan, in June. Investors have been watching for signs of progress toward a trade deal, but expectations for a breakthrough are low, as there have been few indications that either side is willing to back away from demands that derailed a previous round of negotiations in May. Nasdaq declined 36.88 points or 0.44 percent to 8293.33 and S&P 500 was down by 4.89 points or 0.16 percent to 3020.97, while Dow Jones Industrial Average gained 28.90 points or 0.11 percent to 27221.35.

Crude oil futures ended higher on Monday as US and China prepared to resume trade talks. Formal negotiations between China and the US, which is set to get under way on Tuesday in Shanghai, also is being watched for signs of progress, which could help support global economic expansion. Tensions between the superpowers have underpinned concerns about crude appetite. Meanwhile, the Federal Reserve's policy decision, which is expected to deliver a quarter-point interest-rate cut on Wednesday, also could be a key inflection point for global markets, as central banks attempt to curtail a global slowdown that could impinge upon energy consumption. Benchmark crude oil futures for September surged 67 cents or 1.2 percent to settle at $56.87 a barrel on the New York Mercantile Exchange. October Brent gained 15 cents or 0.2 percent to settle at $63.62 a barrel on London's Intercontinental Exchange.

Indian rupee ended stronger against dollar on Monday, due to increased selling of the American currency by exporters and banks. Local investors cheered with Chief economic advisor to the Union finance minister Krishnamurthy Subramanian expressing confidence over India's economy swelling to a $5-trillion giant by 2025. He said this target is definitely achievable, backing his confidence with the theory of motivation which states that if a goal is stretched by just 10-15 per cent on the higher side that creates a sweet spot and that private investment and behavioral economics will drive the economy forward. Besides, market participants are also looking forward to the US and China trade talks, which can impact rupee movement. The US and Chinese officials are restarting negotiations in an effort to resolve the year-long trade dispute. On the global front, dollar held near a two-month high on Monday ahead of what is expected to be the first U.S. interest rate cut since the financial crisis, while Britain's rising Brexit risks slugged the pound to a fresh 28-month low. Finally, the rupee ended at 68.75, 14 paise stronger from its previous close of 68.89 on Friday.

The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 8015.79 crore against gross selling of Rs 5002.64 crore, while in the debt segment, the gross purchase was of Rs 727.24 crore with gross sales of Rs 2052.34 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.50 crore against gross selling of Rs 1.28 crore.

The US markets ended mostly lower on Monday as Wall Street awaited a hotly anticipated rate decision by the Federal Reserve and a new round of US-China trade negotiations. Asian markets are trading mostly higher on Tuesday as investors prepared for an expected US interest rate cut this week. Indian markets ended lower with cut of over half a percent on Monday tracking weak global cues and unabated foreign fund outflows. Auto stocks took a hit amid report that the government proposed a hike in registration fees for old and new vehicles. Today, the markets are likely to make slightly positive start mirroring Asian peers. Some support will come with SBI Ecowrap report stating that India has benefited from the US-China trade war by exporting more items to China. Overall exports to the US grew 9.46 per cent to $52.4 billion in 2018-19, for China the growth was 25.6 per cent to $16.7 billion. Traders may take note of a report that Finance Minister Nirmala Sitharaman called for a significant reduction in the central bank's policy rates and said the government did not intend to review the budget proposal for overseas sovereign borrowings. The minister also said the increase in surcharge on foreign portfolio investments (FPI) was not intended to hurt investors. Besides, the commerce and industry ministry has floated a cabinet note for a new export incentives scheme that would be compliant with the World Trade Organization (WTO) norms. However, there may be some cautiousness with CARE Ratings report that India is staring at a rise in food inflation soon, as weak monsoon rainfall hits the country's food output. It said the retail inflation in the food components for June 2019 has risen to 13-months high and weak progress going ahead could push food inflation higher. Meanwhile, the Securities and Exchange Board of India (SEBI) may ease norms for Foreign Portfolio Investors (FPIs) in line with recommendations from a government committee led by HR Khan. There will be some cautiousness in the banking sector stocks with Moody's report that even as more and more crippled banks come out of the dud asset tunnel, the heightening growth slowdown and the lingering crisis at non-banking lenders pose fresh challenges to their asset quality. There will be some buzz in the Telecom stocks with Fitch's statement that India's reserve price of $70 million per MHz is expensive, and will force Vodafone Idea and Bharti Airtel to participate in 5G spectrum auctions in a limited way. There will be some reaction in metal stocks with the World Steel Association report that India's crude steel output rose by 4 per cent to 9.336 million tonne (MT) in June 2019 compared to8.976 MT produced in the year-ago month. There will be lots of important earnings announcements too, to keep the markets in action.

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

Nifty Top volumes

• Maruti Suzuki India has introduced CNG Variant in Ertiga and Tour M. 
• Cipla's wholly owned subsidiary -- Cipla Gulf FZ LLC and Alvotech have entered into an exclusive partnership for the commercialization of AVT02. 
• SLCM has entered into a strategic partnership with State Bank of India for Collateral management and warehousing services. 
• Infosys has launched Cyber Defence Center in Bucharest, Romania.