Indian equity benchmarks ended the choppy day of trade below their crucial 35,600 (Sensex) and 10,800 (Nifty) levels, as traders remained worried on renewed concerns over a global trade war after US President Donald Trump on Friday announced plans to impose a 25% tariff on $50 billion worth of Chinese goods that contain industrially significant technologies. Markets traded in a tight band throughout the day as sentiments remained dampened with report showing that India's trade deficit widened to $14.62 billion during the month under review as against $13.84 billion in May 2017, the highest in nearly four months mainly because of rising oil imports. Adding to the pessimism, a private FDI Report 2018 said that the number of greenfield FDI projects in India during the year fell sharply by 21% to 637. The US has surpassed India to become the top destination for greenfield FDI investment in 2017. Sentiments also weighed down with rating agency Moody's sounding a note of caution that any reduction in excise duty on petrol and diesel would adversely affect fiscal deficit unless it is matched by a commensurate cut in expenditure. Observing that fiscal consolidation would be closely watched for assigning the sovereign rating, Moody's said India's biggest challenge is its fiscal strength which is relatively low as compared to -- Baa -- rated peers. However, losses remained capped with report that India's merchandise exports grew to a six-month high of 20.18% in the month of May 2018, boosted by a rise in receipts of petroleum, engineering and pharmaceutical products. Traders also found some support with Piyush Goyal's statement that the government is hopeful of achieving double-digit gross domestic product (GDP) growth in the country by the fourth quarter of the ongoing financial year. He also added that that government is committed to meet the fiscal deficit target of 3.3% for the current fiscal. Finally, the BSE Sensex declined 73.88 points or 0.21% to 35,548.26, while the CNX Nifty was down by 17.85 points or 0.17% to 10,799.85.

The US markets ended mostly in red on Monday as escalating trade tensions between the U.S. and China weighed on investors' appetite for risk. The weakness on the markets reflected lingering concerns about a global trade war after the U.S. and China announced plans to impose tariffs on billions of dollars' worth of imported goods. President Donald Trump announced plans to impose tariffs on $50 billion worth of Chinese goods last Friday, leading China to announce plans to impose tariffs on 545 products imported from the U.S. The move triggered China to retaliate, with Beijing announcing its own selection of duties on U.S. goods. The Chinese State Council's commission on tariffs and customs stated that a 25 percent tariff would occur in early July on $34 billion of U.S. products. Traders expressed concerns the new tariffs announced by the U.S. and China could negatively affect global economic growth. On the U.S. economic front, the National Association of Home Builders released a report showing an unexpected deterioration in homebuilder confidence in the month of June. The report said the NAHB/Wells Fargo Housing Market Index dipped to 68 in June from 70 in May. The Dow Jones Industrial Average declined 103.01 points or 0.41 percent to 24987.47 and the S&P 500 was down by 5.91 points or 0.21% to 2773.75, while the Nasdaq added 0.65 points or 0.01 percent to 7747.02.

Crude oil futures ended higher on Monday as traders assessed escalating trade tensions between the U.S. and China, and looked to a possible output boost by major crude producers later this week. Besides, investors were fixated on how trade-related disagreements between the U.S. and China are escalating. President Donald Trump on Friday announced tariffs on $50 billion worth of Chinese imports, and Beijing retaliated by targeting high-value American exports. The possible punitive tariff of 25% means that U.S. crude oil would no longer be a low-cost alternative despite the current price discount. It is expected that the high price gap between Brent and WTI to remain in place during the summer month. Benchmark crude oil futures for July delivery surged 79 cents or 1.2 percent to settle at $65.85 a barrel on the New York Mercantile Exchange. August Brent crude added $1.90 or 2.6% at $75.34 a barrel on London's Intercontinental Exchange.

Indian rupee trimmed all of its early losses and managed to end marginally higher against the American currency on Monday, due to increased selling of the American currency by exporters and banks. Traders took some support with report that India's merchandise exports grew to a six-month high of 20.18% in the month of May 2018, boosted by a rise in receipts of petroleum, engineering and pharmaceutical products. However, gains remained capped as anxiety remained among the traders with report showing that India's trade deficit widened to $14.62 billion in May 2018 as against $13.84 billion in May 2017, the highest in nearly four months mainly because of rising oil imports. On the global front, dollar edged up towards a seven-month high on Monday as investors bet the United States and China would avoid a full-blown trade war, although tensions between the two slowed its gains. Finally, the rupee ended at 67.98, 4 paise stronger from its previous close of 68.02 on Friday.

The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 9507.75 crore against gross selling of Rs 11151.88 crore, while in the debt segment, the gross purchase was of Rs 303.91 crore with gross sales of Rs 765.05 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.30 crore against gross selling of Rs 0.63 crore.

The US markets ended mostly lower on Monday, as concerns about a global trade war after the US and China announced plans to impose tariffs on billions of dollars worth of imported goods weighted on the sentiments. Asian markets were trading mostly lower on Tuesday trade after US President Donald Trump fired a fresh salvo in the ongoing trade spat between the US and China. Indian equity markets ended Monday's trade slightly in red, as India's trade deficit widened to $14.62 billion in May as against $13.84 billion in May 2017, the highest in nearly four months mainly because of rising oil imports. Today, the start is likely to remain cautious, tracking weak global cues as fears of a global trade war resurfaced. There will be some cautiousness with Commerce and Industry Minister Suresh Prabhu's statement that global trade is facing headwinds and these challenges are needed to be tackled properly to boost world economy. He also said that the US decision to impose high import duties on certain steel and aluminium products have led to a trade war kind of situation, with other countries too raising their tariff walls. Traders will also be concern about a private report that the Indian rupee would continue to witness pressure in the coming days, but it should get respite in the medium term as trade protectionism ends up hurting the US economy, a net importer of goods. Market participants however will be getting some encouragement with the Finance Ministry's statement that it would be increasingly difficult for businesses to remain outside the tax net as Goods and Services Tax (GST) is leading to formalisation of the economy. Traders will be getting some support with the Reserve Bank of India's data that bank credit grew 3.4% on a sequential basis in the December 2017 quarter, helped by better performance by private sector banks and an uptick in industrial credit after two successive quarters of declines. There will be buzz in sugar stocks with report that India is likely to export around 500,000 tonnes or just a quarter of the volume mandated by the government for overseas sales in 2017-18 amid higher prices at home.

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

Nifty Top volumes

• Yes Bank has received final approval and registration from SEBI for acting as Custodian of Securities. 
• Lupin is expecting single digit sales growth in current financial year with sluggish US business likely to impact overall global business of the company. 
• NTPC has inked an agreement with the Noida Authority to use treated sewage water at its Dadri power plant.  
• TCS has opened its new delivery center in Suresnes, France.