Boisterous benchmarks showcased an enthusiastic performance on Tuesday, by rallying over one and a half percentage point amid strong global cues. Sentiments remained up-beat since start as key bourses made a gap-up opening and there appeared not even an iota of profit booking in the session as the bourses managed to fervently gain from strength to strength, as investors continued accumulating fundamentally strong stocks. Frontline indices not only ended the session near intraday high levels but also recaptured their crucial 8,900 (Nifty) and 28,900 (Sensex) bastions on hefty across the board buying. Sentiments remained up-beat on expectation of further delay in interest rate hike by the US Federal Reserve on account of slower than expected US jobs data in August. Traders also took some encouragement with report that growth in India's service industry accelerated to its fastest pace in more than 3-1/2 years in August, driven by a surge in domestic and foreign demand. The Nikkei/Markit Services Purchasing Managers' Index jumped to 54.7 in August, its highest since January 2013, from 51.9 in July. Reports that Prime Minister's Office (PMO) will soon clear projects worth Rs 20 lakh crore, too aided sentiments. Moreover, Project Monitoring Group (PMG) has already cleared 276 projects worth 10 lakh crore which were stalled due to various reasons including roads, environment, coal and power among others. Global cues too remained supportive with European counters making a positive start, while Asian markets rallied. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Markets got some support with surge in Indian rupee against the US dollar on selling of the American currency by exporters and banks amid sustained foreign fund inflows. Finally, the BSE Sensex surged 445.91 points or 1.56% to 28,978.02, while the CNX Nifty gained 133.35 points or 1.51% to 8,943.00.

The US markets closed higher on Tuesday, with the tech-heavy Nasdaq logging a record close as investors digested a weak services-sector report, which might help convince the Federal Reserve to stay its hand as it considers raising interest rates. Companies in the US that offer services, such as health care, retail goods and financial advice, grew in August at the slowest pace since 2010, a potentially worrisome sign for third-quarter growth unless activity picks up again soon. The Institute for Supply Management stated that its non-manufacturing index fell to 51.4% last month from 55.5% in July. Reading over 50% signal that more businesses are expanding instead of contracting, but it was the weakest showing since February 2010, shortly after the end of the Great Recession. The Federal Reserve's labor-market conditions index slipped back into negative territory in August after a positive reading in July, the seventh negative reading in the past eight months. The Dow Jones Industrial Average added 46.16 points or 0.25 percent to 18,538.12, Nasdaq was up 26.01 points or 0.50 percent to 5,275.91, while S&P 500 gained 6.5 points or 0.30 percent to 2,186.48. 

Crude oil futures moved modestly higher on Tuesday on expectations of a supply cut from Saudi Arabia and Russia. The world's two biggest producers agreed to act if prices fall much further from current sub-$50 levels. Also, the dollar was lower, underpinning demand for oil. However, there was some concern on weak Services data, after the Institute for Supply Management said its nonmanufacturing index fell to 51.4 last month from 55.5 in July- the slowest pace of growth since 2010. Benchmark crude oil futures for October delivery dropped $0.39 or 0.90 percent to close at $44.83 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for November delivery declined by $0.22 or 0.46 percent to $47.41a barrel on the ICE.

Indian rupee extended the gaining streak for the fifth consecutive day and hit a four month high on Tuesday against the US dollar, after lower-than-expected US payroll data reduced fears of a rate hike by the US Federal Reserve. The domestic currency remained in jubilant mood from the very beginning and positive start followed by a rally in local equity markets, bucking global trends led the rupee to strengthen further. There were signs of continued buying interest from foreign institutional investors (FIIs) in local equity markets. On the global front, the dollar edged lower against the other major currencies on Tuesday, as lower expectations for an upcoming US rate hike weighed on the greenback. Finally the rupee ended at 66.52, stronger by 30 paise from its previous close of 66.82 on Friday.

The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 3644.03 crore against gross sell of Rs 3398.34 crore, while in the debt segment, the gross purchase was of Rs 1255.88 crore with gross sales of Rs 320.02 crore.

The US markets coming out of a long weekend made a modestly positive close in last session on report from the Institute for Supply Management showing that service sector growth slowed to its lowest rate in over six years in the month of August. The Asian markets are mostly higher in the early deals on expectations that the Federal Reserve will refrain from raising interest rates at its September meeting. However, the Japanese market was trading in red on strength in yen against dollar and other major currencies. The Indian markets bucking global trend went for a humongous rally in the last session with benchmarks hitting their one and half year high. Today, the start is likely to be in green on positive global cues, though some consolidation too can be seen after the big rally. Meanwhile, Prime Minister Narendra Modi has said that the country's priority will be to work towards trade facilitation agreement (TFA) for services, a move that will help in movement of professionals. There will be some buzz in the agriculture and irrigation related stocks on reports that India's apex rural-development bank National Bank for Agriculture and Rural Development (NABARD) will manage a Rs. 77,000-crore corpus as part of a Central government push to complete 99 unfinished irrigation projects across the country by 2019, and bring water to 76.03 lakh hectares. In the next 15 days, Nabard will raise about Rs 6,000 crore (through private placement) and then on lend it to the Central Government for the funding of Pradhan Mantri Krishi Sinchayee Yojana (PMKSY). The PSU oil marketing companies too may see some action as global oil prices inched lower with market participants remaining skeptical that producers will reach an agreement to freeze output.

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

Nifty Top volumes

• Lupin's has received tentative approval for its Silodosin Capsules 4 mg and 8 mg from the US FDA to market a generic version of Allergan Sales, LLC's Rapaflo Capsules, 4 mg and 8 mg.
• Tata Motors has secured orders worth Rs 900 crore for over 5,000 buses from various state and city transport undertakings in the first five months of FY17.
• Maruti Suzuki India has reported 3.24% rise in its production to 1, 27,991 units in August 2016 as compared to 1,23,979 units in August 2015.
• Aurobindo Pharma is planning to launch 19 approved products that have an addressable market of $6.8 billion in the US in the next three quarters.
• Sun Pharmaceutical Industries has signed a strategic distribution alliance with Mitsubishi Tanabe Pharma Corporation for these 14 prescription brands.