Indian equity markets ended Monday's session on lower note for the second straight day. After a weak start, indices traded in red terrain, impacted with ICRA's statement that the GST compensation fund may see a shortfall of Rs 15,000-25,000 crore for 2019-20, and it pegged the unpaid GST compensation to the states at Rs 60,000-70,000 crore for the October 2019-January 2020 period. Adding more worries, Former Finance Minister P Chidambaram said that the NDA government has not defined whether the $5 trillion dollars economy it aims to achieve is real GDP or nominal and claimed real GDP would not touch the figure at the current growth level by 2024 or 2025. Key indices remained under pressure for the whole trading day, on the back of negative cues from the global markets. The street remained worried, amid reports that the momentum of the bilateral trade between India and the US is moving in favor of Washington, mainly due to the sudden increase in energy import by New Delhi. Market participants were seen taking note of Union Minister Anurag Thakur's statement that the moderation in India's growth coincides with a deceleration in growth of global output and the IMF has projected the country's GDP growth to pick up to 5.8 per cent in 2020. Finally, the BSE Sensex lost 162.23 points or 0.39% to 40979.62, while the CNX Nifty was down by 66.85 points or 0.55% to 12031.50.

The US markets ended higher on Monday as traders returned to ignoring concerns about the economic impact of the deadly coronavirus outbreak. The Chinese government revealed data that a total of 40,171 cases of coronavirus have been confirmed, with 908 people dying from the disease. The World Health Organization warned Monday that the spread of the coronavirus to people who have not visited China could be the spark that becomes a bigger fire, while urging nations to fight the epidemic together. Meanwhile, traders seemed reassured by Chinese President Xi Jinping's pledge to win the fight against the coronavirus outbreak. Jinping said in remarks on state television that China will speed up the development of drugs aimed at treating the deadly pneumonia-like virus. Expectations for the Federal Reserve to prop up the economy with easy financial conditions if the coronavirus spills over into the US also helped to support stocks. Federal Reserve Chairman Jerome Powell is due to head up to Capitol Hill in the coming days for his semi-annual testimony to Congress. Powell is slated to testify before the House Financial Services Committee on Tuesday and the Senate Banking committee on Wednesday.

Crude oil futures ended sharply lower on Monday, marking their lowest settlement in more than a year, amid rising concerns about global economy and the outlook for energy demand due to the coronavirus outbreak. Worries about excess crude supply have risen after Russia said that it needs more time to decide whether to join any additional oil output cuts recommended by a technical committee from the Organization of the Petroleum Exporting Countries (OPEC) and its allies. The committee had advised further output cuts until the end of the second quarter. Energy demand outlook is weak on account of rising concerns over the severity of the coronavirus, which has infected more than 40,600 people globally. Crude oil futures for March dropped 75 cents or 1.5 percent to settle at $49.57 a barrel on the New York Mercantile Exchange. April Brent fell $1.20 or 2.2 percent to settle at $53.27 a barrel on London's Intercontinental Exchange.

Indian rupee appreciated against the American currency on Monday, as fresh sale of the US currency by exporters paced up amid easing crude oil prices. Local currency got support with Union Finance Minister Nirmala Sitharaman's statement that the Centre, in the Budget 2020, has laid the foundation of increasing consumption while ensuring that the government's investment is deployed to build infrastructure leading to a $5 trillion economy by 2024-25. Some support also came with Revenue Secretary Ajay Bhushan Pandey's statement that a 12 percent growth in tax collections is achievable in the next financial year (FY21) in an economy that is estimated to clock a 10 percent nominal GDP growth. On the global front, dollar edged up against its major rivals on Thursday, as investors expected the U.S. economy to remain resilient to the spread of the coronavirus across the world, with payroll data from last week reinforcing traders' optimism.  The last traded price of rupee was 71.29, 15 paise stronger from its previous close of 71.44 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 15022.99 crore against gross selling of Rs 5079.31 crore, while in the debt segment, the gross purchase was of Rs 6060.08 crore with gross sales of Rs 2383.57 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.62 crore against gross selling of Rs 1.33 crore.

The US markets ended higher on Monday as investors looked past the potential economic hit from the spreading coronavirus to prepare for more corporate earnings. Asian markets are trading mostly in green on Tuesday following overnight gains on Wall Street. Indian markets ended lower for second straight session on Monday in line with global markets as the death toll from a coronavirus outbreak exceeded the SARS epidemic. Today, the markets are likely to get an optimistic start after oil prices fell sharply overnight coupled with positive leads from global markets. Some support will come with report that the Reserve Bank of India (RBI) announced detailed rules for exempting incremental car, home and micro, small and medium enterprises (MSMEs) loans from maintaining cash reserve ratio (CRR). The RBI said CRR will not have to be maintained for five years or for the tenure of the loan, depending upon which-ever is less. This will essentially mean a lower cost for banks and will help improve liquidity. Traders may take note of Agriculture Minister Narendra Singh Tomar's statement that India, the world's largest consumer and importer of pulses, is on track to become self-sufficient in production of the protein-rich commodity and will further boost the output to meet global demand. Though, there may be some cautiousness with Fitch Ratings' statement that the RBI extending the MSME loan restructuring scheme and allowing relaxation in asset classification for certain real-estate projects signify a gradual shift away from the regulator's earlier effort to enhance quality and transparency of asset classification by banks. Meanwhile, the government said a new draft National Tourism Policy has been formulated with focus on employment generation and development of tourism in a sustainable manner. There will be some buzz in the banking stocks with Finance Minister Nirmala Sitharaman's statement that public sector banks' (PSBs) bad loans came down to Rs 7.27 lakh crore at the end of September 2019, on host of measures taken by the government to improve financial health of the banks in the country. Reality stocks will be in focus with report that in a relief to realty players, the National Company Law Appellate Tribunal (NCLAT) has held that any insolvency process initiated by a flat buyer or financial institution would be limited to the project concerned only and not impact other projects of developers. There will be some reaction in coal stocks with the government data showing that India's coal imports in November rose 8.6% from a year earlier to 21.83 million tonnes, following three straight months of decline. There will be lots of earnings reaction based on the performance of the companies.

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

Nifty Top volumes

• L&T's subsidiary -- L&T Metro Rail Hyderabad has completed India's second-largest operational metro rail project at Hyderabad.
• Cipla has acquired nutrition products' portfolio from Wanbury. 
• JSW Steel has reported crude steel production of 14.10 lakh tonnes for January 2020, registering fall of 3% over 14.53 lakh tonnes in January 2019. 
• IOC's Mathura refinery has completed the revamp of its all units to produce BS-VI grade fuels ahead of the deadline for roll out of newer emission norms from April 2020.