Dalal Street on Monday witnessed a bloodbath as both the larger peers, Sensex and Nifty, crashed by over a percent. The start of the day was negative, with India Meteorological Department's statement that the overall monsoon deficiency in the country has reached 43 per cent due to its sluggish pace. Adding more anxiety among market participants, the data released by the Commerce Ministry showed that trade deficit, gap between imports and exports, widened to $15.36 billion during the month under review, as against the deficit of $14.62 billion in May 2018. But, India's merchandise exports grew by 3.93 percent in May to $29.99 billion as compared to same period of last year, on the back of healthy growth in electronics and chemicals shipments. Weak trade continued on Dalal Street throughout the day, amid heavy selling in almost all the sectoral indices along with mixed cues from other Asian markets. Traders paid no heed towards rating agency ICRA's report that though macro fundamentals of the Indian economy have taken an unfavourable turn in the past few quarters, the continuity of National Democratic Alliance (NDA) led by Prime Minister Narendra Modi after the general elections augers well for key sectors of the economy. The street also overlooked the Reserve Bank of India's report showing that inching closer to its historic peak, India's forex kitty increased by $1.686 billion to $423.554 billion for the week to June 7. Finally, the BSE Sensex declined 491.28 points or 1.25% to 38,960.79, while the CNX Nifty was down by 151.15 points or 1.28% to 11,672.15.

The US markets ended higher on Monday on account of optimism the Fed will signal a near-term interest rate cut when announcing its monetary policy decision on Wednesday. Street expects the Fed to leave interest rates unchanged but make changes to its accompanying statement pointing to an openness to cutting rates in the near future. CME Group's FedWatch tool currently indicates just a 17.5 percent chance the Fed will cut rates this week but a 71.2 percent chance for a rate cut next month. Recent indications the U.S.-China trade dispute is contributing to a slowdown in US economic growth has led to speculation the Fed may cut rates, with Fed Chairman Jerome Powell pledging to act as appropriate to sustain the expansion. Disappointing economic data seems to have reinforced the optimism about a potential rate cut, as the New York Fed released a report before the start of trading showing a sharp downward turn in regional manufacturing activity in June. The New York Fed said its general business conditions index plunged to a negative 8.6 in June from a positive 17.8 in May, with a negative reading indicating a contraction in manufacturing activity. Street had expected the index to drop to a positive 10.0. With the much record-setting monthly decrease, the general business conditions index recorded its first negative reading in over two years. A separate report from the National Association of Home Builders showed an unexpected pullback in homebuilder confidence in the month of June. The report said the NAHB/Wells Fargo Housing Market Index dropped to 64 in June after jumping to 66 in May. The decrease surprised participants, who had expected the index to inch up to 67. Dow Jones Industrial Average rose 22.92 points or 0.09 percent to 26112.53, Nasdaq gained 48.37 points or 0.62 percent to 7845.02 and S&P 500 was up by 2.69 points or 0.09 percent to 2889.67.

Crude oil futures ended lower on Monday, with investors digesting worrisome demand updates issued last week and keeping tabs on typically price-supportive risks percolating in the Middle East. Meanwhile, a monthly report from Energy Information Administration (EIA) showed that crude-oil production from seven major US shale plays is forecast to climb by 70,000 barrels a day in July to 8.520 million barrels a day. Besides, the market is also awaiting a decision by Organization of the Petroleum Exporting Countries (OPEC) and its allies on whether to extend their production-cut deal past the end of this month, when it expires. Citing comments from Saudi energy minister Khalid al-Falih that the Saudis are absolutely confident OPEC and non-OPEC partners will agree to extend their oil production-cut deal. Al-Falih said that all OPEC members, except one, have agreed to delay the group's June 25-26 meeting to the first week of July. The decision to change the date would have to be unanimous. Benchmark crude oil futures for July dropped 58 cents or 1.1 percent to settle at $51.93 a barrel on the New York Mercantile Exchange. August Brent declined $1.07 or 1.7 percent to settle at $60.94 a barrel on London's Intercontinental Exchange.

Continuing its downward slide for the third day in a row, Indian rupee ended weaker against dollar on Monday, on continued demand for the American unit. Traders remain concerned about India Meteorological Department stating that the overall monsoon deficiency in the country has reached 43 per cent due to its sluggish pace. Some cautiousness also came in with report that the continuing of high crude and gold imports pushed India's trade deficit to a six-month high of $15.36 billion in May. Besides, India's exports grew by 3.93 per cent to $30 billion in May on account of healthy growth in sectors such as chemicals, pharmaceuticals and engineering, while imports too rose by 4.31 per cent to $45.35 billion in May. Rising crude oil prices and heavy selling in domestic equities also kept pressure on the Indian Rupee. On the global front, U.S. dollar rose to a two-week high on Monday as strong economic data led investors to think again about how dovish the Federal Reserve is likely to sound at this week's meeting. Finally, the rupee ended at 69.91, 11 paise weaker from its previous close of 69.80 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 5177.24 crore against gross selling of Rs 5361.03 crore, while in the debt segment, the gross purchase was of Rs 5537.02 crore with gross sales of Rs 6278.80 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.84 crore against gross selling of Rs 0.39 crore.

The US markets ended higher on Monday ahead of central bank policy meetings around the world as investors continue to bet the Federal Reserve will slash interest rates this year. Asian markets are trading mostly in green on Tuesday ahead of the US Federal Reserve's interest rate decision on June 19. Indian markets extended losses for second straight session on Monday amid fears over India's retaliatory tariffs on US goods, ongoing NBFC crisis and concerns over poor progress in monsoon. Today, the markets are likely to make slightly positive start following overnight gains on Wall Street. Traders will be taking some support with Niti Aayog CEO Amitabh Kant's statement that circular economy has the potential to generate 1.4 crore jobs in next 5-7 years and create lakhs of new entrepreneurs. Some support may also come with a private report that capital investment in commercial real estate by Indian investors in overseas markets soared by 92 percent to $700 million between the first quarter of 2018 and the first quarter of this year. Traders may take note of Reserve Bank of India Governor Shaktikanta Das' statement that the central bank will not hesitate to take any required measure to maintain the financial stability of the economy. However, there may be some cautiousness with report that Fitch lowered India's growth forecast to 6.6 per cent for the current fiscal from 6.8 per cent projected earlier, as manufacturing and agriculture sectors showed signs of slowing down over the past year. It said the Reserve Bank has cut interest rates by 0.25 per cent in its June meeting - the third cut so far this year- in the face of weak growth momentum and contained inflation. Meanwhile, the CBDT has issued a revised 32-page guideline for compounding of offences under direct tax laws, 2019 which will be executed under the I-T Act, 1961. There will be some buzz in the gem and jewellery stocks with report that CRISIL believes the withdrawal of benefits under the Generalized System of Preferences (GSP) effective June 5, as announced by the US earlier, will moderately hit gem and jewellery exports from India. The gems and jewellery sector is already under pressure on account of stringent lending rules and working-capital crunch.

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

Nifty Top volumes

• Power Grid Corporation has received approval from CERC to offer towers to telecom companies for BTS installation to improve mobile connectivity, especially in remote rural areas. 
• Tata Motors has launched automated manual transmission versions of its compact sedan Tigor with price starting at Rs 6.39 lakh. 
• SBI will continue to funds to NBFCs as it feels the problems facing industry are not very grave and system-wide. 
• Federal Bank has improved Customer Experience with Tata Consultancy Services' Digital CASA Platform.