Indian equity benchmarks ended on optimistic note amid choppy trading session on Monday, as government's assurance on mass production of COVID-19 vaccines and more infrastructures spending boosted investor sentiment. The benchmarks staged a gap up opening but soon turned negative, as the government data showed that contracting for the fifth straight month, India's exports slipped 10.21 per cent to $23.64 billion in July, on account of decline in the shipments of petroleum, leather and gems and jewellery items. However, domestic indices once again entered into green territory in morning session, with report that foreign portfolio investors (FPI) remained net investors in Indian markets in the first half of August, pumping in Rs 28,203 crore in debt and equities on net basis in the period. Some support also came as Finance Minister Nirmala Sitharaman has exhorted large central public sector enterprises (CPSEs) to achieve 50 percent of their planned capital expenditure (capex) target for FY21 by the month of September in order to support economic growth amidst covid-19 pandemic. Key indices managed to keep their heads above water in afternoon session, taking support from Commerce and Industry Minister Piyush Goyal's statement that India will take equal and proportional measures to protect domestic manufacturing if other countries continue imposing restrictions or barriers on Indian goods. He also said that if some countries continue exporting low-quality goods or dumping products or routing exports through India's free trade agreement (FTA) partners, India would take actions. Markets added further strength in final hour of trade, even as a private report stating that as many as 159 companies listed on the BSE cumulatively saw a decline of Rs 22,538 crore in their EBITDA in the three months ended March 2020 compared to the December quarter, reflecting an early impact of the coronavirus pandemic. EBITDA stands for earnings before interest, tax, depreciation and amortisation. Finally, the BSE Sensex gained 173.44 points or 0.46% to 38,050.78, while the CNX Nifty was up by 68.70 points or 0.61% to 11,247.10.

The US markets settled mostly higher on Monday with the S&P 500 index ending near record territory, despite a congressional stalemate over fresh stimulus to help Americans and businesses hurt by the coronavirus pandemic. Support also came in on report that Homebuilder confidence matched a record high in the month of August, according to a report released by the National Association of Home Builders. The report said the NAHB/Wells Fargo Housing Market Index jumped to 78 in August after soaring to 72 in July. Street had expected the index to inch up to 73. With the much bigger than expected increase, the housing market index matched the record high set in December of 1998. However, signaling a slower pace of growth, the New York Federal Reserve released a report showing a much bigger than expected decrease by its index of regional manufacturing activity in the month of August. The New York Fed said its general business conditions index tumbled to 3.7 in August from 17.2 in July, although a positive reading still indicates growth in regional manufacturing activity. Street had expected the index to dip to 15.0. Looking ahead, firms remained optimistic that conditions would improve over the next six months, though optimism fell for a second consecutive month.

Crude oil futures ended higher on Monday amid expectations that China plans to ship in large volumes of US crude in August and September. Chinese state-owned oil companies had tentatively booked tankers to carry at least 20 million barrels of US crude in August and September. This has implied that Sino-American tensions aren't as bad as first feared and that demand for oil is gradually increasing as countries begin to open up their borders and return to normality. Meanwhile, compliance with OPEC+ production cuts was around 95% to 97% - a historically high level - in July also boosted oil prices. Crude oil futures for September rose 88 cents or 2.1 percent to settle at $42.89 a barrel on the New York Mercantile Exchange. October Brent crude gained 57 cents or 1.3 percent to settle at $45.37 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally higher against dollar on Monday, owing to dollar sale by exporters and banks. Sentiments were positive with report that foreign portfolio investors (FPI) remained net investors in Indian markets in the first half of August, pumping in Rs 28,203 crore in debt and equities on net basis in the period. However, upside remained capped as the government data showed that contracting for the fifth straight month, India's exports slipped 10.21 per cent to $23.64 billion in July, on account of decline in the shipments of petroleum, leather and gems and jewellery items. On the global front, dollar edged lower and commodity currencies inched higher as investors were relieved by a delay in the review of the U.S.-China trade pact which left the deal intact. Finally, the rupee ended at 74.88, 2 paise stronger from its previous close of 74.90 on Friday.

The FIIs as per Monday's data were net sellers in both equity segment and debt segment. In equity segment, the gross buying was of Rs 4773.73 crore against gross selling of Rs 4961.46 crore, while in the debt segment, the gross purchase was of Rs 226.87 crore with gross sales of Rs 849.18 crore. Besides, in the hybrid segment, the gross buying was of Rs 338.74 crore against gross selling of Rs 18.54 crore.

The US markets ended mostly higher on Monday despite a congressional stalemate over fresh stimulus to help Americans and businesses hurt by the coronavirus pandemic. Asian markets are trading mixed on Tuesday as investors continued to watch developments in US-China tensions. Indian markets ended in the green territory on Monday as financial heavyweights recovered with Bajaj Finance and Axis Bank contributing gains. Today, the markets are likely to get a cautious start amid mixed global cues. Investors are looking ahead to the SEBI's meeting today with brokers and depositories to hear their views on the new margin and share pledging norms that will be effective from September 1. Traders will be concerned with rising coronavirus cases in the country. India has recorded over 54,288 coronavirus cases in the past 24 hours, taking its total past the 2.7-million mark. With 880 fatalities reported on Monday, the country's death toll has surged to 51,025. There will be some cautiousness as SBI in its economic research report, Ecowrap, said that it expects the Gross Domestic Product (GDP) to slip by 16.5% during the first quarter of this fiscal year. Earlier this year, SBI's Ecowrap had projected a GDP contraction of 20%. The report adds that corporate Gross Value Added (GVA) de-growth is better than expected. However, the report does flag concerns about the coronavirus pandemic entering rural areas. The percentage of cases in rural districts to total new cases has risen to 54% in August. Meanwhile, the government has extended the imposition of anti-dumping duty by three months on caustic soda imported from China and Korea to guard domestic manufacturers. NBFCs stocks will be in focus as the government relaxed norms for Partial Credit Guarantee Scheme (PCGS) for purchase of bonds and commercial papers by public sector banks and extended its period by three months, with a view to provide additional liquidity to crisis-ridden NBFCs and housing finance companies (HFCs). There will be some reaction in textile industry stocks as the Cotton Association of India (CAI) upgraded its cotton production forecast by 19 lakh bales to 354.50 lakh bales for the 2019-20 season in its July estimate on the back of higher fibre production in the central zone.

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

Nifty Top volumes

• M&M has unveiled the All-New Thar, the most eagerly awaited and legendary SUV, on the occasion of India's 74th Independence Day. 
• Hindalco Industries has reported consolidated net loss attributed to shareholders of Rs 709 crore for Q1FY21 against net profit of Rs 1,063 crore for Q1FY20. 
• Reliance Industries is in talks to buy online furniture retailer Urban Ladder and milk delivery firm Milkbasket to strengthen its e-commerce business. 
• NTPC has begun bulk supply of fly ash using newly developed infrastructure at its Rihand project in Uttar Pradesh to distant cement plants.