Bulls took full control over Dalal Street on Monday and frontline gauges settled at their fresh closing high levels, conquering their crucial 11,550 (Nifty) and 38,200 (Sensex) levels for the first time ever. After a gap-up opening, markets traded with traction and there appeared not even an iota of profit booking in the session with benchmarks fervently gaining from strength to strength to end near intraday highs, as investors continued hunt for fundamentally strong stocks. Sentiments remained jubilant with traders taking encouragement from former chief economic advisor Arvind Virmani's statement that India's economic growth seems to be back on a recovery path and the country will be on a firm 7.5% plus growth track this fiscal. He also said the US-China tariff war provides an opportunity to increase India's exports to the US. Adding to the optimism, the Central Board of Direct Taxes (CBDT) said that income Tax collection in the country stood at a record Rs 10.03 lakh crore during 2017-18. It also said during 2017-18, a record number of 6.92 crore I-T returns were filed, which was 1.31 crore more than 5.61 crore returns filed in 2016-17. Markets extended rally in second half of trade to settle near intraday highs with Fitch Ratings in its latest report stating that the impact of currency weakness on India's sovereign credit profile is likely to be limited on the back of relatively strong external finances, especially the low level of external debt. It also said currency depreciation could nevertheless add to existing pressures in the corporate and banking sectors. Meanwhile, market participants took note of report that the International Labour Organisation said India needs strong wage policies to promote inclusive growth as inequality, informality and gender wage gap still persists in India. Traders shrugged off report that India's current account deficit (CAD) will widen to 2.5% of the GDP in the current fiscal due to higher oil prices that has been accentuated by rupee depreciation. Finally, the BSE Sensex surged 330.87 points or 0.87% to 38,278.75, while the CNX Nifty was up by 81.00 points or 0.71% to 11,551.75.

Magnifying their up move for third straight session, the US markets ended higher on Monday, as a pair of billion-dollar deals reaffirmed confidence that the US economy continues its steady expansion. Optimism that progress would be made toward resolving contentious trade disputes between the US and China also bolstered sentiment. Stocks remained buoyed following a report on Friday that negotiators from the US and China were mapping out talks with the aim of resolving the trade dispute by November. Such an outcome would remove a huge overhang of uncertainty over the markets. Further, a resurgence in deal-making activity also buoyed sentiment in several sectors. However, markets trimmed their gains just ahead of the closing bell, after private report that President Donald Trump escalated his criticism of Fed Chairman Jerome Powell and higher interest rates. Besides, this week will see the imposition of 25% tariffs on $16 billion worth of Chinese imports, an action by the Trump administration that China has said it would retaliate against. Looking ahead, Wednesday will see the release of minutes from the Federal Reserve's most recent meeting, which could provide insight into the central bank's thinking in terms of policy changes. Dow Jones Industrial Average gained 89.37 points or 0.35 percent to 25758.69, the S&P 500 added 6.92 points or 0.24 percent to 2857.05 and Nasdaq was up by 4.68 points or 0.06 percent to 7821.01.

Extending their gains for third straight session, Crude oil futures ended higher on Monday, a day ahead of the expiration of the September contracts, as US sanctions on Iran contributed to concerns over tighter global oil supplies. However, emerging-market and Chinese demand worries had rippled through the market last week, sending oil prices down for a third week in a row. The emerging-market worries were compounded by signs of slower growth in China, where the trade dispute with the US has dimmed the economic outlook for the world's second-largest economy and its thirst for oil. Benchmark crude oil futures for September rose 52 cents or 0.8 percent to settle at $66.43 a barrel on the New York Mercantile Exchange. October Brent crude gained 38 cents or 0.5 percent at $72.21 a barrel on London's Intercontinental Exchange.

Recovering from its record low closing, Indian rupee ended considerably stronger against dollar on Monday, following heavy dollar selling from banks and exporters.  Investors' sentiments turned positive with former chief economic advisor Arvind Virmani's statement that India's economic growth seems to be back on a recovery path and the country will be on a firm 7.5% plus growth track this fiscal. He also said the US-China tariff war provides an opportunity to increase India's exports to the US. Moreover, the domestic indices zoomed to record highs which cleared the way for the rupee's up-move. Traders shrugged off report that India's current account deficit (CAD) will widen to 2.5% of the GDP in the current fiscal due to higher oil prices that has been accentuated by rupee depreciation. On the global front, US dollar strengthened against its major counterparts on Monday, as sentiments lifted up amid hopes that the US-China trade talks this week might help resolve an escalating trade war. Finally, the rupee ended at 69.83, 33 paise stronger from its previous close of 70.16 on Thursday.

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 10768.47 crore against gross selling of Rs 12104.13 crore, while in the debt segment, the gross purchase was of Rs 695.45 crore with gross sales of Rs 1045.93 crore. Besides, in the hybrid segment, the gross selling was of Rs 3.15 crore against no buying.

The US markets rose on Monday on optimism over trade talks between the United States and China, though they fell from session highs after President Donald Trump criticized the Federal Reserve's raising interest rates. Asian markets were trading mostly in green on Tuesday, as investors optimistically looking ahead Wednesday's release of the minutes from this month's FOMC meeting as well as a meeting of central bankers later this week. Extending previous session's rally, Indian equity markets ended at fresh record closing highs on Monday, amid positive global cues and some recovery in the rupee. Today, the markets are likely to make a flat-to-positive start amid mixed global cues. Traders will be getting some encouragement with a private report that India has been remarkably resilient in the recent turmoil in emerging market equities largely driven by macro stability, low policy uncertainty, improving growth and domestic flows. There will be some support with Retirement fund body the Employees' Provident Fund Organisation (EPFO) payroll data suggesting that as many as 47.13 lakh jobs were created during September 2017 to June this year. Traders will also be reacting to report that Commerce and industry minister Suresh Prabhu reviewed two proposed policies- on agriculture export and new industrial policy to take the country's exports to a new level. Meanwhile, the Securities and Exchange Board of India (SEBI) is considering doubling or even quadrupling the minimum ticket size for investment in portfolio management services (PMS) schemes. There will be some buzz in the steel sector stocks with report that India's steel ministry has strongly opposed the inclusion of finished steel products in the proposed regional free-trade agreement, saying it would have an adverse impact on the industry that's recovering from a crisis. There will be some reaction in aviation sector related stocks with report that giving in to demand from the airlines, the GST Council may propose to bring Aviation Turbine Fuel (ATF) under the indirect tax regime in its next meeting.

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

Nifty Top volumes

• Coal India is expecting 367 mt output by the end of the current financial year from its 115 ongoing projects. 
• Vedanta will be investing $2.3 billion towards CAPEX on its oil and gas activities in the near term to increase the reserve base by around 375 million barrels. 
• Bharti Airtel has entered into a strategic alliance with ZEEL to drive entertainment content on mobile phones. 
• Eicher Motors and VE Commercial Vehicles are developing a new line of products, including a complete range of electric vehicles for public transportation.