Indian benchmark equity indices staged a blockbuster performance on the first day of the week by vehemently rallying over two percentage points for the session and re-conquering their psychological levels. Sentiments got a boost with Prime Minister Narendra Modi's statement that India is the fastest developing country among the "larger economies of the world". He also said that India is the only economy which has not been affected by the global economic crisis that has hit the world.  Furthermore, Union Minister of State for Commerce and Industry Nirmala Sitharaman said manufacturing in the country is picking up and the perception that there is any slowdown in the sector is wrong. Some support also came with the report that India's foodgrain production can increase to 253.16 million tonnes in 2015-16 crop year on likely improvement in output of wheat and pulses despite back-to-back drought. Besides, slip in the wholesale price index (WPI)-based inflation for the fifteenth straight month further lifted the mood of the investors. Reversing four months of rising trend, WPI inflation fell to (-) 0.9 per cent in January as food articles, mainly vegetables and pulses, turned cheaper. This was further contraction to the WPI inflation reading of (-) 0.73 per cent in December 2015. Appreciation in Indian rupee too supported the sentiments. Indian rupee strengthened by 11 paise to 68.12 against the dollar on increased selling of the US currency by exporters and banks. Meanwhile, Investors didn't show much of a reaction, to the macro-economic data released by the government post market hours on Friday. The data released revealed that factory output shrunk for the second straight month in December to 1.3%. The consumer price inflation edged up to a 17-month high of 5.69 per cent in January, driven up by higher food costs. On the global front, Asian stocks rebounded from a three-year low, while European stock markets rallied for a second straight session on Monday. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. The frontline indices soon gathered momentum and surged around two percent through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session's highest levels in dying hour. However, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs. Finally, the BSE Sensex surged by 568 points or 2.47% to 23554.12, while the CNX Nifty rose 182 points or 2.61% to 7,162.95.

The US markets remained closed on Monday on account of ‘President's Day' holiday.

Crude oil futures remained steady in light holiday trading on Monday. Though, there was speculation that OPEC might agree to cut production to reduce a supply glut that has pushed prices to the lowest in over a decade. Benchmark crude oil futures for March delivery gained $0.39 or 1.4 percent to $29.83 a barrel in electronic trading on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $33.67, up $0.31 or 0.90 percent on the ICE.

Indian rupee appreciated for the second consecutive session against dollar on increased selling of dollar by banks and exporters amid gains in Asian currencies. Besides weakness in the dollar against some currencies overseas and surge in local equity market also added to the positive milieu of Indian currency. Sentiments got a boost with slip in the wholesale price index (WPI)-based inflation for the fifteenth straight month. Reversing four months of rising trend, WPI inflation fell to (-) 0.9 per cent in January as food articles, mainly vegetables and pulses, turned cheaper. On the global front, yen's advance halted as Japan's leader criticized extremely volatile currency markets and as gains for China's yuan on its first full day's trade in a week helped settle global financial nerves. Finally, the rupee ended at 68.06, 18 paise stronger from its previous close of 68.24 on Friday.

The FIIs as per Monday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 4694.27 crore against gross selling of Rs 4737.86 crore, while in the debt segment, the gross purchase was of Rs 213.50 crore with gross sales of Rs 1259.78 crore.        

The US markets remained closed in last session on account of a holiday, unable to give any cues to other global markets. Though the Asian markets have made a green start and some of the indices in the region are up by over a percent in early deals as crude oil rose back above $30 a barrel. Meanwhile, the Bank of Korea kept its key rate unchanged for an eighth consecutive month. The Indian markets went for a huge relief rally with major indices surging over two percent in last session. There was across the board buying and all the beaten down fundamentally strong stocks moved considerably higher. Today, the start is likely to be in green and the markets will be extending their gains of last session. However, there is likely to be consolidation, and some profit taking too can appear going forward. Meanwhile, the Reserve Bank of India (RBI) Governor Raghuraman Rajan stated that RBI and the government don't favour undervaluation of the exchange rate as a means to spur economic growth. Traders are likely to turn cautious with exports falling for the 14th consecutive month with shipments in January, 2016 contracting 13.6 per cent year-on-year to $21 billion due to weak overseas demand as well as fall in major export items. Imports also fell during the month by 11 per cent to $28.7 billion that resulted in the trade deficit narrowing to an 11-month low of $7.6 billion. Traders will also be concerned with India Ratings maintaining a negative outlook for infrastructure sector for the next fiscal as it sees a high concentration of poorly performing assets. There will be some buzz in the capital goods sector, as the government unveiled the first-ever policy for the country's capital goods sector which envisages increasing the share of capital goods in total manufacturing activity from 12 per cent at present to 20 per cent by 2025. The oil & gas sector too may see some action, on reports that Oil Ministry will soon come up with a Cabinet note on new crude import policy for spot crude purchases by state-owned refiners.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Bharat Heavy Electricals has successfully commissioned a 101 MW gas-based Combined Cycle Power Plant on Engineering, Procurement and Construction basis, in Tripura.
• Diversified conglomerate ITC is planning to invest Rs 800 crore in Odisha over the next few years to set up a hotel property and a food processing park in the state.
• Tata Steel SEZ, wholly owned subsidiary of Tata Steel is planning to invest about Rs 2,000-2,500 crore for development of infrastructure at Gopalpur in Odisha in the near term.
• HDFC Bank has opened three new branches in Jaipur, Rajasthan.
• L&T is likely to get the final clearance from the Odisha government for setting up a 3 mtpa aluminium plant with an estimated investment of Rs 12,000 crore in Rayagada district in the next 2-3 months.