Monday's trading session was of consolidation as the Indian frontline indices appeared a bit fatigued and remained in tight band for most part of the day. However, the benchmarks managed to extend the winning momentum for the second consecutive day of trade, as local sentiments continued to show signs of improvement. Investors took some encouragement with Finance Minister Arun Jaitley's statement that the government hopes to pass the landmark Constitution Amendment Bill for national Goods and Services Tax (GST) as well as the bankruptcy and insolvency bill in the second half of the Budget session beginning April 20. Some support also came with the report that overseas investors have bought a net $1.41 billion worth of shares so far in March, paring this year's outflows to $1.48 billion.  However, caution prevailed in view of muted factory output data, which was released on Friday and retail inflation data, slated to be announced later in the day. India's industrial production declined for a third month in a row, contracting by 1.5 per cent in January due to poor performance of manufacturing sector and lower offtake of capital goods. Meanwhile, buying in banking counter mainly aided sentiments after RBI governor Raghuram Rajan commented that the headline fiscal deficit target for the next financial year (at 3.5 per cent) year is a comfort for the central bank. It has already hiked hopes of a rate cut while shares of oil & gas producers such as ONGC, Reliance Industries and GAIL India also rose on the back of stability in the crude oil prices. On the flip side, metal pack remained under pressure owing to weaker-than-expected Chinese economic data. On the global front, shares throughout Asia rallied on Monday, while European markets rose in early trade. Back home, the benchmark started the day on an optimistic note tracking the Asian peers which traded mostly in the green following the upbeat overnight cues from the Wall Street. Though investors did not show any knee-jerk reaction to the WPI inflation, which remained in the negative zone for 16 months in a row, but the indices came off the day's high as investors gradually squared some positions in the afternoon trade. Finally, the BSE Sensex gained 86.29 points or 0.35% to 24804.28, while the CNX Nifty rose 28.55 points or 0.38% to 7,538.75.

The US markets closed flat on Monday, with the Dow industrials logging a new closing high for 2016, while the S&P 500 edged lower as losses in the materials and energy sector capped gains for consumer-discretionary shares. The Fed's two-day policy meeting kicks off Tuesday, with a policy statement slated to be released Wednesday. The central bank is widely expected to keep interest rates on hold, even as recent economic data support the case for a rate increase in the short term. Since the last Fed meeting US inflation has shown signs of stabilizing, with one measure published by the Dallas Fed rising to 1.9 percent, its closest to the Fed's 2 percent goal in 2-1/2 years. Meanwhile, the US unemployment rate held at 4.9 percent in February, near the level many Fed officials believe represents full employment. The Dow Jones Industrial Average added 15.82 points or 0.09 percent to 17,229.13, the Nasdaq was up 1.81 points or 0.04 percent to 4,750.28 while, the S&P 500 lost 2.55 points or 0.13 percent to 2,019.64. 

Crude oil futures fell sharply on Monday, on concern that Iran was maintaining little interest in joining major producers in freezing production and after Russia lent support to Iran's refusal to align with other major producers in a joint effort to cap output. Also, there was pressure with the Organization of the Petroleum Exporting Countries (OPEC) statement that global demand for crude from its members, including Saudi Arabia and Iran, will be less than previously thought in 2016 due to competing non-OPEC supply. Benchmark crude oil futures for April delivery plunged by $1.27 or 3.30 percent to $37.23 a barrel after trading in a range of $38.82 and $40.51 a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery closed at $39.53, down $0.86 or 2.00 percent on the ICE.

Indian rupee giving up the early gains ended modestly lower on Monday, as traders turned cautious ahead of the consumer price inflation (CPI) data due later in the day after the WPI inflation came flat. WPI fell for the 16th straight month in February, declining an annual 0.91%, driven down by weakness in crude prices. Earlier, the domestic currency made a positive start, extending its gains for the fourth session amid dollar selling by banks and exporters. Later the gains in the equity markets too supported the rupee, but  as the trade progressed cautiousness crept in and halted the rupee gains. On the global front, dollar made a flat start, witnessing large swings in previous week, as investors were eyeing Japanese and US central bank policy meetings that could provide them with fresh direction. Finally, the rupee ended at 67.10, 5 paise weaker from its previous close of 67.05 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 3512.73 crore against gross selling of Rs 3074.15 crore, while in the debt segment, the gross purchase was of Rs 1126.75 crore with gross sales of Rs 1226.04 crore.         

The US markets despite recovering from their early lows remained choppy and made a flat closing in the last session, as traders were looking ahead to the Federal Reserve's monetary policy decision scheduled to be announced Wednesday. Most of the Asian markets have made weak start, though the cuts are marginal. Japanese market too was cautious ahead of the Bank of Japan's monetary policy review. The Indian markets lost their momentum in the second half but still managed to post gain of around half a percent in the last session, traders were a bit cautious ahead of two central bank's monetary policy announcements and largely overlooked the WPI inflation remaining in deflation zone for 16th consecutive month. Today, the start is likely to be cautious and the markets may open flat-to-soft tailing the weakness in the global markets, after oil declined again. Traders will also be reacting to CPI inflation dipping to four months low of 5.18% in February 2016, bolstering rate cut hopes. However, there will be some concern too  with hailstorms in key farming belts of the country that may lead to the fourth successive crop failure and RBI too may wait to see the actual impact on food and overall retail inflation. There will be action in the oil & gas sector, as the global rating agency Standard & Poor's has said that the new price formula and calibrated marketing freedom for gas produced from fields in difficult terrain could help attract investments in India's oil and gas sector . On the other hand, the gold and jewellary stocks are likely to remain under pressure, as the Finance Minister Arun Jaitley has refused to roll back a 1 per cent excise duty on non-silver ornaments proposed in the Budget.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• In order to boost bilateral trade, Yes Bank, the country's fifth largest private sector bank, has inked pact with the India-Brazil Chamber of Commerce on March 11, 2016.
• Reliance Industries' wholly-owned subsidiary Model Economic Township is planning to develop an electronics manufacturing hub and footwear park at Jhajjar in Haryana.
• BHEL has successfully synchronizing the 110 MW Unit-7 at Barauni Thermal Power Station in Bihar following Renovation and Modernisation.
• Mahindra's Farm Equipment Sector, a part of the $16.9 billion Mahindra Group, has entered into agricultural equipment rental services with the launch of TRRINGO, India's foremost organized rental service.
• Wipro has won a multi-year contract to develop a new IT platform for Danish energy firm NRGi's operations.