Indian equity benchmarks suffered sharp losses of over a percent on Monday, tracking heavy losses in index majors Bajaj Auto, Mahindra & Mahindra and Reliance Industries amid negative cues from global markets. Markets made slightly negative start as traders remained cautious with RBI Governor Shaktikanta Das' statement that the risk of a second wave of COVID-19 could put sand in the wheels of the nascent recovery. He also said the decision to cut benchmark repo rate would depend upon the evolving situation with regard to inflation which is currently above the tolerance level of the central bank. Key gauges extended fall in the afternoon session, as anxiety remained among traders with report that as many as 441 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.35 lakh crore owing to delays and other reasons. Market participants also took note of report that industry body PHDCCI expects India's GDP to contract by 7.9 percent in the current financial year and grow by 7.7 percent in 2021-22, assessing that the worst is over and the economy is on the verge of a slow recovery. The chamber, however, stated that unemployment remains a key challenge to be addressed by the government. A sharp depreciation in the rupee against the US dollar also weighed on investor sentiment. Indian rupee settled at 73.84 against the US dollar, registering a fall of 23 paise over its previous close. Meanwhile, the Ministry of Finance has issued operational guidelines for implementation of the interest waiver scheme ahead of the hearing in the matter in the apex court on November 2. Finally, the BSE Sensex fell 540.00 points or 1.33% to 40,145.50, while the CNX Nifty was down by 162.60 points or 1.36% to 11,767.75.

The US markets ended sharply lower on Monday, following the lackluster performance seen in the previous session, amid concerns about a resurgence in coronavirus cases, with new infections reaching a new record high last Friday. Data from John Hopkins University showed that new coronavirus cases reached a new high of 83,757 last Friday and topped 83,000 again on Saturday. White House chief of staff Mark Meadows argued that the pandemic could not be controlled and suggested the administration would focus on vaccines and therapeutics. The spike in new coronavirus cases comes as lawmakers in Washington appear to remain at an impasse over a new stimulus bill. Adding to the negative sentiment, the Commerce Department released a report showing an unexpected slump in new home sales in the month of September. The report said new home sales tumbled by 3.5 percent to an annual rate of 959,000 in September after jumping by 3 percent to a revised rate of 994,000 in August. The pullback surprised participants, who had expected new home sales to surge up by 2.8 percent. The unexpected pullback in new home sales was partly due to a steep drop in sales in the Northeast, which plunged by 28.9 percent to a rate of 32,000. New home sales in the Midwest and South also slumped by 4.1 percent and 4.7 percent, respectively, while new home sales in the West spiked by 3.8 percent.

Crude oil futures ended lower with cut of over three percent on Monday as COVID-19 cases in the US and Europe continue to surge, raising alarm over demand for crude. Confirmed global cases of COVID-19 climbed to 43 million on Monday, according to data compiled by Johns Hopkins University, while the death toll rose to 1.15 million.  Coronavirus infections in the US hit a record for the second day on Sunday. Cases in France hit a record of over 50,000 over the weekend. Further, fading hopes about a US stimulus package and prospect of increased crude supply raised worries about energy demand. Crude oil futures for December fell $1.29 or 3.2 percent to settle at $38.56 a barrel on the New York Mercantile Exchange. December Brent crude slipped $1.31 or 3.1 percent to settle at $40.46 a barrel on London's Intercontinental Exchange.

Continuing previous session losses, Indian rupee concluded substantially weaker against dollar on Monday as muted domestic equities and strong American currency weighed on investors' sentiment. Sentiments remained fragile as PHD Chamber of Commerce and Industry (PHDCCI) has stated that it expects India's GDP to contract by 7.9 per cent in the current financial year (FY21) and grow by 7.7 per cent in FY22, assessing that the worst is over and the economy is on the verge of a slow recovery. On the global front, dollar found support on Monday, as surging coronavirus cases in Europe and the United States and a lack of progress toward a U.S. stimulus package put traders in a cautious mood, although hopes for a Brexit trade deal held sterling steady. Finally, the rupee ended at 73.84, 23 paise weaker from its previous close of 73.61 on Friday.

The FIIs as per Monday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 6082.12 crore against gross selling of Rs 5011.18 crore, while in the debt segment, the gross purchase was of Rs 1965.11 crore with gross sales of Rs 123.41 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.76 crore against gross selling of Rs 7.02 crore.

The US markets ended sharply lower on Monday as soaring coronavirus cases and uncertainty about a fiscal relief bill in Washington dimmed the outlook for the US economic recovery. Asian markets were trading in red on Tuesday following an overnight tumble on Wall Street. Indian markets ended lower with over a percent cut on Monday with selling witnessed across all sectors led by auto, metals and banks. Today, the start of session is likely to be optimistic despite a weak set of global cues. Traders will be taking encouragement with a report that in what could be a healthy sign of economic recovery, goods and services tax (GST) collections recorded in the month of October are likely to cross Rs 1 lakh crore for the first time this fiscal. Some support will come with British drug maker AstraZeneca Plc stating that the Covid-19 vaccine being developed by the University of Oxford produced an immune response in both elderly and young people and adverse reactions were lower among the elderly. Besides, India on Tuesday reported its lowest single-day spikes in total coronavirus infection tally in over three months. The daily jump of 36,838 in total count was the lowest since July 21 even as the tally soared to 7,945,888. Death toll has mounted to 119,535. Traders may take note of Prime Minister Narendra Modi's statement that India plans to achieve one nation one gas grid and shift towards a gas-based economy. However, there may be some cautiousness as exporters expressed concerns over rising freight charges and shortage of containers as it would impact the country's outbound shipments, and sought Commerce Ministry's intervention in the matter. There will be some buzz in the agriculture stocks with report that state-owned FCI and state procurement agencies have bought 21 percent more paddy so far in the kharif marketing season of this year at 151.17 lakh tonnes amounting to Rs 28,543 crore. Metal stocks will be in focus as according to the World Steel Association (worldsteel) India's crude steel production fell by 2.9 percent to 8.520 million tonnes (MT) in September 2020. There will be some reaction in auto component sector stocks with a private report that sales of automotive components will be dented this fiscal as demand for automobiles plunges to a decadal low after the Covid-19 pandemic acted as a brake on demand, and lockdowns caused supply-chain disruptions and labour shortages.

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

Nifty Top volumes

• Bharti Airtel has launched Airtel IQ. Airtel IQ is a cloud-based omni-channel communications platform, enables brands to deepen engagement with customers through timely and secure communication. 
• Tata Motors' passenger vehicle vertical has crossed 40 lakh cumulative production milestone, nearly three decades after it rolled out its first model in the segment -- Tata Sierra SUV in 1991. 
• Kotak Mahindra Bank is exploring a potential takeover of smaller rival IndusInd Bank. 
• Tech Mahindra reported a fall of 5.28% in its consolidated net profit attributed to owner at Rs 1,064.60 crore for Q2FY21 as compared to Rs 1,123.90 crore for Q2FY20.