Indian equity markets commenced the week on a sluggish note as the benchmarks showcased an unenthusiastic performance on Monday and settled marginally below the neutral line. The key indices oscillated in an extremely tight range through the session as market participants remained on the sidelines lacking conviction amid the persistent worries over North Korea and coming French elections. Sentiments remained subdued with Reserve Bank of India's report that credit growth plunged to a whopping six-decade low of 5.08% in the financial year 2016-17, as against 10.7% a year ago. Investors also remained cautious with the private report that India's current account deficit (CAD) is expected to widen to 1.6% of GDP this year from 0.5% in 2016, owing to higher commodity prices and an expected strong domestic recovery. According to the report, stronger global demand and higher export prices are driving exports recovery, while the recovery in imports reflects higher commodity prices and likely improvement in domestic demand. Adding the woes, Revenue Secretary Hasmukh Adhia said that services sector is likely to attract a higher tax rate of 18% from the current 15% under the Goods and Services Tax (GST) regime, thus making services "slightly" more expensive.  He also said Tax buoyancy is likely to take a hit under the GST regime with the government predicting a very modest 8-9% growth in the indirect tax collections in the first year of GST implementation. In the previous fiscal year, indirect tax collections recorded a growth of 22%. However, downside remained capped with the report that Inflation based on the wholesale price index slipped to 5.70% in March due to easing fuel prices and cost decline of manufactured goods even as food prices hardened. Fuel and power inflation rose 18.16% in March from 21.02% last month. The WPI inflation, reflecting the annual rate of price rise, in February was 6.55%. Some support also came with the report that growth in exports of goods from India reached its peak in the last month of fiscal 2016-17 with a 27.59% increase, year-on-year, to $29.23 billion in March 2017. After two continuous years of decline, exports in April-March 2016-17 posted an increase of 4.71% to $274.64 billion compared to the previous fiscal. Finally, the BSE Sensex decreased 47.79 points or 0.16% to 29413.66, while the CNX Nifty was down by 11.50 points or 0.13% to 9,139.30.

The US markets surged with the start of the new week and the major averages gained around a percent on Monday, regaining some ground following the decline seen last week. The gains were mainly due to bargain hunting with traders picking up stocks at reduced levels after the Dow and the S&P 500 ended at their lowest closing levels in two months before going for a long weekend. Traders largely shrugged off the ongoing geopolitical concerns as well as the release of a batch of disappointing U.S. economic data. The National Association of Home Builders released a report showing a bigger than expected pullback in homebuilder confidence in the month of April. The NAHB/Wells Fargo Housing Market Index dropped to 68 in April after jumping to 71 in March. Economists had expected the index to edge down to 70. The bigger than expected decrease by the index came after it reached its highest level since June of 2005 in the previous month. The Dow Jones Industrial Average gained 183.67 points or 0.9 percent to 20,636.92, the Nasdaq added 51.64 points or 0.9 percent to 5,856.79, while S&P 500 ended higher by 20.09 points or 0.9 percent to 2,349.01.

Crude oil futures once again declined on Monday, despite better-than-expected Chinese economic data. Traders seemed to be concerned about numerous geopolitical flashpoints, including the U.S.-North Korea saber-rattling kerfuffle. Prices were also weighed down by the New York Fed saying its general business conditions index tumbled to 5.2 in April after dipping to 16.4 in March. The bigger than expected drop by the headline index came amid a notable slowdown in new orders growth, as the new orders index plunged to 7.0 in April. Benchmark crude oil futures for May delivery ended lower by $0.53or 1 percent to $52.65 on the New York Mercantile Exchange. In London, Brent crude for May delivery ended down by $0.44 at $55.45 on the ICE.

Indian rupee ended weaker against the US dollar on Monday due to increased demand of the greenback from the importers and the banks. Sentiments remained dampened with Reserve Bank of India's report that credit growth plunged to a whopping six-decade low of 5.08% in the financial year 2016-17, as against 10.7% a year ago. Some cautiousness also prevailed among investors with the private report that India's current account deficit (CAD) is expected to widen to 1.6% of GDP this year from 0.5% in 2016, owing to higher commodity prices and an expected strong domestic recovery. However, losses remained capped with the report that Inflation based on the wholesale price index slipped to 5.70% in March due to easing fuel prices and cost decline of manufactured goods even as food prices hardened. On the global front, Yen was trading at 5-month high against US Dollar as rising geopolitical tensions helped to keep safe havens in demand. Finally, the rupee ended at 64.52, 11 paise weaker from its previous close of 64.41 on Thursday.

The FIIs as per Monday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 3233.02 crore against gross selling of Rs 3545.28 crore, while in the debt segment, the gross purchase was of Rs 2180.08 crore with gross sales of Rs 412.55 crore.

The US markets surged in last session despite some disappointing economic data; traders mainly resorted to bargain hunting after the major bourses slipped to their month's low. The Asian markets have made a mixed start with some indices trading marginally in red, though Japanese shares gained amid a weaker yen after the Treasury Secretary Steven Mnuchin said that the dollar's strength is a good thing. The Indian markets after a volatile trade and some recovery attempt ended modestly lower in the last session and the Nifty slipped below the 9150 mark, with traders reacting to a mixed batch of earnings. Today, the start is likely to be in green tailing the mostly positive cues. Traders will also be getting some support with the World Bank's latest report, in which it said that India's economic momentum is expected to pick up speed from 6.8 percent in 2016 to 7.2 percent by 2017 after a modest setback due to weaker than expected investments and the effects of the withdrawal of large denomination bank notes. It also said that timely and smooth implementation of the GST could prove to a significant benefit to economic activity. However, India faces the challenge of further accelerating the responsiveness of poverty reduction to growth.  There may be some cautiousness in the market with Citi reportedly pointing out finance ministry officials, how some global banks and funds were taking advantage of India's treaty with France to escape tax. Also, concerned over the rising prices of steel and rupee appreciation, engineering exporters' apex body EEPC India has approached the Commerce Ministry seeking its intervention to curb such volatility which is adversely impacting the sector. The whole IT pack will be in focus, as India's largest IT company Tata Consultancy Services (TCS) is scheduled to report its earnings for the quarter ended March 31, 2017. There will be lots of other important earnings announcements too, to keep the markets buzzing. PSU stocks too will be in action as government plans to sell stakes worth $5.4 billion in seven state-run companies during the current financial year as Asia's third-largest economy looks to fund its fiscal deficit amid ramped-up spending on rural areas and infrastructure. The part sale of government stakes in state-run and private firms is critical to meet the fiscal deficit target of 3.2% of gross domestic product in the year to March 2018. India aims to raise Rs 725 billion ($11.26 billion) through stake sale during the year.

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

Nifty Top volumes

• HCL Technologies has renewed transformational IT services engagement with Singapore Exchange for another five years.
• Axis Bank has touched 1 million micro-borrowers mark and is not keen on acquiring stake in any microlender.
• Idea Cellular is planning to launch payments bank operations by the end of June 2017 and is signing up retailers who sell its telecom services to also double up as banking touch points to allow customers to carry out transactions.
• Bharti Airtel has offered free high-speed data to its post-paid subscribers for the next three months.