Exuberant Indian markets finished the enthralling first day of a new week with a spirited performance, extending Friday's rally on the back of broad-based buying amid firm global cues. Sentiments got a boost with the report that quick progress of monsoon in last one-two days has taken the crucial weather system to many new regions and is expected to intensify in the days ahead.  This is good news for farmers who have suffered two consecutive droughts and have so far planted crops in 11% less area than last year.  Some support also came with Economic Affairs Secretary Shaktikanta Das' statement that the country's GDP growth is likely to touch 8 per cent in the current fiscal 2016-17, on the back of above normal monsoon. Das expressed hope that the likely passage of Goods and Services Tax (GST) bill in Parliament would add to the business sentiment and will further help in country's growth. Further, market participants digested Reserve Bank of India's (RBI) Governor Raghuram Rajan's decision of not going for a second term and bow out in September. The global rating agency Fitch stated that India's sovereign ratings will not be affected solely by the unexpected departure of central bank governor Raghuram Rajan at the end of his term in September. Meanwhile, shares of companies engaged in defence and aviation sectors rallied after the government relaxed foreign direct investment (FDI) norms in civil aviation, airports, pharmaceuticals and defence sectors. Further, Real estate stocks surged for the second straight day after the Securities and Exchange Board of India (Sebi) proposed further relaxations to the real estate investment trusts (Reits) regulations, to attract real estate developers towards launching these instruments.  On the global front, Asian stock markets ended the first day of the week on optimistic note, while European counterparts too appeared to be in a sanguine mood. Back home, the frontline indices slowly but steadily started gathering steam and surged by around half a percent by the noon session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session's highest levels in dying hour of the trade. Finally, the BSE Sensex surged 241.01 points or 0.91% to 26866.92, while the CNX Nifty rose 68.30 points or 0.84% to 8,238.50.

The US markets closed higher on Monday, but off their session highs, following the lead of European markets as polls showed support swinging back toward the UK remaining a member of the European Union ahead of a referendum. The gains were attributed to investors who have made bearish bets that stocks would continue to be pressured by Brexit fears now being caught flat-footed as surveys indicate UK voters may favor retaining their EU membership. The so-called Brexit vote is set for Thursday and investors have been following it closely for fear that Britain's exit from Europe's trading bloc could unsettle global markets. US central bank, Minneapolis Fed President Neel Kashkari stated that a vote by Britain to leave the European Union could have moderate direct effects on the US economy, but probably does not pose big financial risks. The Dow Jones Industrial Average was up by 129.71 points or 0.73 percent to 17,804.87, Nasdaq added 36.87 points or 0.77 percent to 4,837.21, while S&P 500 gained 12.03 points or 0.58 percent to 2,083.25.

Crude oil futures bounced back on Monday, with brent once again topping the $50 a barrel mark, amid easing concerns of a potential UK departure from the European Union. 'Remain' campaign in the U.K. continued to gain momentum ahead of this week's controversial Brexit referendum, hinting that UK voters will reject a proposal to leave the European Union. The dollar weakness too supported the crude prices, the U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, fell to its lowest level in a week. Benchmark crude oil futures for August delivery inched up by $1.35 or 2.78 percent to $49.91 a barrel after trading in a range of $48.78 and $49.99 a barrel on the New York Mercantile Exchange. In London, Brent crude for August delivery closed at $50.60, up $1.43 or 2.91 percent on the ICE.

Indian rupee ended weaker against dollar on Monday after the Central Bank Governor Raghuram Rajan's surprise announcement that he would quit when his term ends in September. Rajan said on Saturday that he will return to academia after his current three-year term expires in September, ending weeks of speculation about his future as RBI governor. Besides, demand for dollar by banks and importers too added the pessimistic milieu of the currency. However losses remained capped up to certain extent due to gains in the local equity market. On the global front, Euro was higher today against the US Dollar, as the latest polls suggest for Brexit remain camp gaining bids. Finally, the rupee ended 67.31, 23 paise weaker from its previous close at 67.08 on Friday.

The FIIs as per Friday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity, the gross buying was of Rs 3077.58 crore against gross selling of Rs 3185.79 crore, while in the debt segment, the gross purchase was of Rs 894.67 crore with gross sales of Rs 557.23 crore.             

The US markets closed higher despite coming off the day's peak in last session, partly offsetting the notable losses posted last week. The strength was on easing concerns about Thursday's referendum on whether Britain will remain in the European Union, though traders kept an eye on Fed Chief Janet Yellen's semi-annual testimony before Congress later in the week. The Asian markets have made mostly a positive start. The Japanese market too after initial fall on yen's strength has recovered and was trading with half a percent of gains. The Indian markets after showing a knee-jerk reaction to RBI governor Raghuram Rajan's decision not to continue for second term, made a smart bounce back and posted decent gains in the last session. Today, the start is likely to be in green but mood will remain cautious on Brexit jitters. However, the Reserve Bank of India and the Governor has assured that it would intervene in the currency market to stem volatility should there be a Brexit vote on Thursday. Traders will also be getting some support with report of good advancement of monsoon, which after a delay is now romping its way through central and north India, allowing farmers to finally begin sowing. Meanwhile, a top World Bank official has said that the banking reforms unveiled by the government and the central bank are unlikely to stall in the aftermath of RBI governor Raghuram Rajan's decision not to seek a second term as the country's macroeconomic policies are strong. However, World Bank has also said that India needs to activate "stalled engines", including private investment and rural demand, to sustain 7.6 percent growth rate in the coming years.  Pharma, defence and airlines stocks that moved higher after government opened the floodgates to foreign direct investment are expected to continue their jubilation even today.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Cipla has inked pact with National Immunobiological Company for HIV and Hepatitis C treatment and on technology transfer and active pharmaceutical ingredients manufacturing.
• In a bid to further strengthen its presence in the US territory, Zee Entertainment Enterprises has entered into an agreement with DISH Network and Sling TV.
• HDFC Bank has launched a digital bank for its small and medium enterprises customers.
• Axis Bank has entered into an agreement with Kasikorn Bank to enhance cooperation in the areas of trade, investment and other businesses.
• TCS has entered into a partnership to deliver next generation cloud-based derivative post trade processing service on the Calypso platform to Sernova Financial, an innovative provider of turn-key post-trade services.