Indian equity markets commenced the week on a sluggish note as frontline indices showcased an unenthusiastic performance on Monday and finished the session on a dull note, marginally below the neutral line, as investors at large remained reluctant to build on long positions ahead of government's Budget session, which will start tomorrow with the Economic Survey of India and Annual Budget presentation for financial year 2017-18 by the Finance Minister Arun Jaitley on Wednesday. Sentiments remained subdued with Former Finance Minister P Chidambaram's statement that cash crunch in the wake of demonetisation is still continuing in many places in the country even though it has eased to an extent in the metros. Broader sentiment was also hit by fears about the impact of US President Donald Trump's immigration curbs. Trump on Friday signed an executive order that suspends the arrival of refugees for at least 120 days and bars visas for travelers from seven Muslim majority countries including Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen for the next three months. The downside risk for the frontline indices was limited by Union Finance Minister Arun Jaitley's statement that the implementation of the Goods and Services Tax (GST), along with demonetisation will bring more revenues as far as states and the central government is concerned and enlarges the size as far as the formal economy is concerned. Giving some comfort to investors , the Central Board of Direct Taxes in clarifications on GAAR, said that the adequate procedural safeguards are in place to ensure that General Anti-Avoidance Rules (GAAR), which seeks to prevent companies from routing transactions through other countries to avoid taxes, are invoked in a uniform, fair and rational manner. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 211.77 crore on January 27, 2017. Finally, the BSE Sensex declined 32.90 points or 0.12% to 27849.56, while the CNX Nifty was down by 8.50 points or 0.1% to 8,632.75.

The US markets closed lower on Monday, with the Dow logging its worst daily loss since mid-October as investors grappled with the latest policy decisions by President Donald Trump. Wall Street also looked ahead to a heavy week of economic data, corporate earnings and the latest meeting by the Federal Reserve set to begin Tuesday. The CBOE Volatility index VIX, a measure of investor anxiety, surged 11% in its biggest one-day pop in about five months, though it remains well below its long-term average of 20. While stocks reacted favorably to Trump's election in November, with major indexes hitting a series of records as investors bet he would push for lower taxes and deregulation, the first week of his administration was marked by confusion and controversy. On the economy front, Americans spent more on new cars and other big-ticket items in December to finish the year on a optimistic note, though a key level of inflation hit the highest level in more than two years. Consumer spending rose 0.5% last month. That's the biggest increase in spending in December since the last month of 2009, just as the US began to emerge from the Great Recession. The Dow Jones Industrial Average dropped 113.23 points or 0.56 percent to 19,971.13, Nasdaq lost 47.07 points or 0.83 percent to 5,613.71, while S&P 500 was down by 12.46 points or 0.54 percent to 2,280.90.

Crude oil futures extended their fall on Monday after trading in a narrow range through the day. Traders weighed the supply response of US shale drillers to prices above $50 a barrel, despite a report by Petro-Logistics SA showing that global oil supplies are falling. Traders were a bit concerned by Commerce Department report showing that personal income increased by slightly less than expected in the month of December. Investors were also keeping an eye on central bank policy reviews in Japan due Tuesday in Asia, as well as the US and UK slated later this week. Benchmark crude oil futures for March delivery declined by $0.54 or 1 percent to $52.63 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended down by $0.63 or 1.12 percent at $55.35 on the ICE.

Appreciating for fourth consecutive session, Indian rupee ended stronger against dollar on Monday on increased selling of US currency by banks and exporters. Local currency got some support with Union Finance Minister Arun Jaitley's statement that the implementation of the Goods and Services Tax (GST), along with demonetisation will bring more revenues as far as states and the central government are concerned and enlarge the size as far as the formal economy is concerned. Besides, dollar weakness against other currencies overseas, barring yen, too gave the rupee more muscle. On the global front, dollar slipped against a basket of some currencies overseas after Treasury yields declined on data showing the US economy growing more slowly than expected. Finally, the rupee ended at 67.95, 8 paise stronger from its previous close of 68.03 on Friday.

The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5854.23 crore against gross selling of Rs 5626.91 crore, while in the debt segment, the gross purchase was of Rs 1915.25 crore with gross sales of Rs 1049.91 crore.

The US markets ended modestly lower in last session, with major averages giving up some gains on profit taking, also the Commerce Department released a report showing that personal income increased by slightly less than expected in the month of December. The Asian markets have made mostly a lower start following the negative lead overnight from Wall Street as worries about the economic impact of US President Donald Trump's immigration policies continued to weigh on markets. The Japanese market has taken the lead among decliners ahead of the Bank of Japan policy decision. The Indian markets after a choppy trade ended modestly in red in last session. Today, the start is likely to remain cautious amid weak global cues and all eyes will be on the release of Economic Survey 2017-18, which is likely to provide insight into the impact of the recent demonetisation move, likely GDP growth target and possibility of cash transaction tax. The survey authored by Chief Economic Adviser Arvind Subramanian may also talk about fiscal deficit targets, cash transaction tax on withdrawals and universal income tax.  There will be some concern in the market with the CII - IBA Financial Conditions Index for Q4 (January-March) FY2016-17 recording a drop below the 50 mark owing to expectation of banks and financial institutions of deterioration in the overall financial conditions in the economy. The IT stocks may come under pressure on reports that the Trump administration has drafted an executive order aimed at overhauling the work-visa programs, including the H1B and L1 visas. There will be lots of important earnings announcements to keep the markets buzzing.

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

Nifty Top volumes

• Larsen & Toubro has reported 38.86% rise in its consolidated net profit at Rs 972.47 crore for the quarter ended December 31, 2016, as compared to Rs 700.34 crore for the same quarter in the previous year.
• Wipro has entered into a strategic partnership with Tradeshift, to offer cloud-based Source-to-Pay Business Process as a Service solution.
• HDFC has reported 12.80% rise in its consolidated net profit at Rs 2728.66 crore for the quarter ended December 31, 2016, as compared to Rs 2419.00 crore for the same quarter in the previous year.
• Maruti Suzuki India has inaugurated its 200th NEXA Showroom in Hyderabad on January 30, 2017.
• Tech Mahindra has reported 11.24% rise in its consolidated net profit at Rs 844.86 crore for the quarter ended December 31, 2016, as compared to Rs 759.49 crore for the same quarter in the previous year.