Pausing four-day gaining streak, Indian equity benchmarks ended Monday's session sharply bearish with losses of around six percent, tracking weak cues from overseas, that fell on fresh cues of US-China trade war. Domestic indices opened deep in the red, as the government extended the lockdown for another two weeks in an attempt the arrest the spread of coronavirus. Sentiments also remained dampened with government data showing that India's core sector output contracted 6.5% in March, marking the worst performance by the key infrastructure areas going back to 2005, as the nationwide lockdown to combat the spread of Covid-19 stalled the economy. Weak company results have also kept investors on the edge as companies keep posting sharp profit drops in the March quarter. The bourses continued to bleed further in late hour of trade and ended near day's low point, as Indian manufacturing activity growth declined sharply in the month of April 2020, amid national lockdown restrictions to help stem the spread of the coronavirus disease 2019 (COVID-19), which in turn led to widespread business closures. As per the survey report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance -fell to 27.4 in April from 51.8 in March. Adding to the pain, the CEOs Snap Poll survey conducted by the Confederation of Indian Industry (CII) stated that the lockdown imposed to prevent the spread of COVID-19 has had an impact on economy and industries in the country due to which the majority of the firms are anticipating a significant decline in their top line, and foresee a delay in economic revival and demand recovery. Finally, the BSE Sensex lost 2002.27 points or 5.94% to 31,715.35, while the CNX Nifty was down by 566.40 points or 5.74% to 9,293.50.

The US markets ended higher on Monday, shrugging off early weakness and a big drop in airline shares, as Florida joined the ranks of US states reopening their economy. Investors have been encouraged by moves in several large states to gingerly reopen for business following coronavirus closures, generally employing social distancing measures, stepped-up sanitation practices and mask requirements at stores. However, upside remained capped on concerns about rising tensions between the US and China after Secretary of State Mike Pompeo claimed there was a significant amount of evidence that the new coronavirus originated from a laboratory in China. On the economic data front, new orders for US manufactured goods nosedived by even more than expected in the month of March, according to a report released by the Commerce Department. The report said factory orders plummeted by 10.3 percent in March after edging down by a revised 0.1 percent in February. Street had expected factory orders to plunge by 9.8 percent compared to the unchanged reading originally reported for the previous month. The steeper than expected drop in factory orders reflected substantial decreases in orders for both durable and non-durable goods.

Crude oil futures ended higher on Monday lifted by reports about several countries planning to ease lockdown restrictions. Oil  prices was also supported by reports that major oil producers are looking to reduce outputs from this month to bring about some stability in prices amid the weak outlook for near and medium term energy demand. Meanwhile, traders eyed tensions between China and the US over the former's handling of the coronavirus outbreak seen as one catalyst for a downbeat mood in an asset that has already been dogged by oversupply. Crude oil futures for June gained 61 cents or 3.1 percent to settle at $20.39 a barrel on the New York Mercantile Exchange. July Brent crude rose 76 cents or 2.9 percent to settle at $27.20 a barrel on London's Intercontinental Exchange.

Snapping its four-day winning streak, Indian rupee ended sharply weaker against dollar on Monday as demand for the American unit from importers and banks picked up. Sentiments turned pessimistic with a government data showing that India's core sector output contracted 6.5% in March, marking the worst performance by the key infrastructure areas going back to 2005, as the nationwide lockdown to combat the spread of Covid-19 stalled the economy. Sentiments also got hit after Indian manufacturing activity growth declined sharply in the month of April 2020, amid national lockdown restrictions to help stem the spread of the coronavirus disease 2019, which in turn led to widespread business closures. Strength in dollar against major rival currencies and heavy selling in domestic equities also kept pressure on the Indian rupee. On the global front, US dollar surged against most major currencies on Monday amid fears that last year's US-China dispute will be re-ignited, this time over the novel coronavirus. Finally, the rupee ended at 75.73, 64 paise weaker from its previous close of 75.09 on Thursday.

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 9655.67 crore against gross selling of Rs 6883.02 crore, while in the debt segment, the gross purchase was of Rs 1193.46 crore with gross sales of Rs 3474.97 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.58 crore against gross selling of Rs 4.76 crore.

The US markets ended higher on Monday as the lifting of lockdowns in some US states boosted optimism. Asian markets are trading in green on Tuesday, with major markets closed for holidays, after tech shares and oil rose on easing coronavirus restrictions and prospects of an economic recovery. Indian markets witnessed bloodbath and ended lower on Monday as weak earnings reports from the markets heavy weights likes of RIL, HUL and Tech Mahindra coupled with rising US-China tensions over coronavirus. Today, the markets are likely to make optimistic start mirroring firm global cues. Some support will come with report that the RBI is considering a proposal for extending the moratorium on bank loans by another three months to help people and industry impacted by the ongoing lockdown to contain COVID-19, with further extension of the nationwide lockdown. Traders may take note of report that market regulator SEBI has said that entities providing capital and debt market services will continue to remain operational during the nationwide lockdown which has been extended for another two weeks to contain the spread of Covid-19. Though, traders may be concerned with report that with 2,573 fresh novel coronavirus cases reported in the last 24 hours, India's total Covid-19 count surged to 42,836, according to the latest Ministry of Health and Family Welfare. The death toll also increased to 1,389 after 83 positive patients succumbed to the highly contagious disease. There may be some cautiousness as domestic rating agency Icra estimated that the country's GDP might contract by as much as 20% in the June quarter and is expected to overcome some lost ground in the remainder of the year but still close 2020-21 down by up to 2%. Also, India's budget gap for the year ended March 31 has touched 4.4% of gross domestic product, breaching the target set in February as an economic slowdown reduced tax collections. Power stocks will be in focus with report that lower consumption in April dipped 22.75% to 85.05 billion units (BU) compared to 110.11 BU in the same month a year ago, mainly due to low demand amid the lockdown to combat COVID-19. There will be some reaction in insurance companies stocks with a private report that the motor and health segments led the decline in premiums for the industry as the month saw premium fall by 9%. While motor segment saw a 7% decline in premiums, health registered an 11% decline in premiums. There will be lots of earnings reaction based on the performance of the companies. 

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

Nifty Top volumes

• Reliance Industries and its partner BP Plc of UK have pushed back the start of production from the second wave of discoveries in their eastern offshore KG-D6 block to end June. 
• ITC has ramped up personal care production to meet the demand for sanitisers.  
• JSW Steel has reported crude steel production at 5.63 lakh tonnes for April 2020, clocking an average capacity utilisation of around 38% for the month. 
• Hero MotoCorp is rapidly gearing up to commence operations, as per the guidelines stipulated by the Ministry of Home Affairs of the Government of India.