Indian equity benchmarks returned to the green zone after four days of losing streak and settled around a percent higher on Monday. Hopes of strong September quarter earnings, which will start with IT giant TCS, and continuation of dovish monetary policy from the Reserve Bank of India later in the week lifted investors' sentiment. Key gauges opened a day with good gap and managed to hold its bullish stream throughout the day, as sentiments got a boost with former Niti Aayog vice-chairman Arvind Panagariya's statement that the fundamentals of the Indian economy are sound as the real GDP in Q3 and Q4 of FY21 already crossed the pre-pandemic level. Sentiments remained up-beat with report that corporate credit profiles showed strong improvement, with more rating upgrades than downgrades witnessed in the first half of the current fiscal, despite the severe second COVID wave. Traders also got encouragement with Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Government of India, Piyush Goyal's statement that at a time when the whole world is coming together to recover from the pandemic and bring growth back on track, a resurgent India is ready to take on the responsibility of being the frontrunner in this revival process. However, during the afternoon session markets pared gains, as some concern came with report that trade deficit spiked to almost $23 billion in September from $13.8 billion in the previous month, as imports surged at a much faster pace than exports, driven by elevated global crude oil prices and massive purchases of gold in the build-up to the festival season. But, markets continued their firm trade to end higher, as optimism remained among traders with Centre for Monitoring Indian Economy's (CMIE) report stated that employment increased by 8.5 million in September, led by the salaried jobs category, as the unemployment rate declined to 6.9 per cent during the month. Some positivity also came from the Ministry of Commerce and Industry in its preliminary data has showed that India's merchandise exports jumped 21.35% to $33.44 billion in September 2021 as compared to $27.56 billion in September 2020, mainly due to better performance by key sectors like engineering goods and petroleum products. Traders also found solace with the finance ministry stating that India's GST collection remained above Rs 1 lakh crore for the third month in a row at over Rs 1.17 lakh crore in September, raising expectations that the second half of the year will post higher revenues. Finally, the BSE Sensex rose 533.74 points or 0.91% to 59,299.32 and the CNX Nifty was up by 159.20 points or 0.91% to 17,691.25.

The US markets closed sharply lower on Monday, after languishing in negative territory right through the day's session. Traders were concerned with High commodity prices, a surge in Treasury yields, worries about growth and rising inflation. Traders were also worried that the regulatory crackdowns and a collapse at Evergrande could hurt an already fragile Chinese economy and weigh on global growth. Market participants were closely watching beleaguered developer China Evergrande, whose shares were suspended in Hong Kong ahead of an announcement about a major transaction. On the economic data front, a report released by the Commerce Department showed new orders for U.S. manufactured goods jumped by more than expected in the month of August, with factory orders surging up by 1.2 percent in the month, after climbing by an upwardly revised 0.7 percent in July. Street had expected factory orders to increase by 0.9 percent compared to the 0.4 percent rise originally reported for the previous month. The report showed orders for durable goods shot up by 1.8 percent, while orders for non-durable goods rose by 0.6 percent. Meanwhile, the Commerce Department said shipments of manufactured goods inched up by 0.1 percent in August after jumping by 1.5 percent in July.

Crude oil futures ended significantly higher on Monday, riding on the decision of the Organization of the Petroleum Exporting Countries, Russia and their allies to stick to its current output policy amid rising demand for petroleum products across the world. The group, known as OPEC+, has decided to raise output by 400,000 barrels per day, sticking to the decision arrived in July. In July, the group agreed to increase monthly production by 400,000 barrels per day (bpd) until at least April 2022 and phase out existing reductions of 5.8 million barrels. Benchmark Crude oil futures for November delivery rose $1.74 or about 2.2 percent to settle at $77.62 barrel on the New York Mercantile Exchange. Brent crude for December delivery added $2.03 or about 2.6 percent to settle at $81.31 a barrel on London's Intercontinental Exchange.       

Indian rupee ended considerably lower against dollar on Monday on emergence of demand for the greenback from importers. Sentiments were fragile as trade deficit spiked to almost $23 billion in September from $13.8 billion in the previous month, as imports surged at a much faster pace than exports, driven by elevated global crude oil prices and massive purchases of gold in the build-up to the festival season. On the global front, dollar edged higher on Monday after two consecutive sessions of losses as hedge funds ramped up their holdings as widening concerns about the Chinese property sector and resilient U.S. Treasury yields boosted the appeal of the greenback. Finally, the rupee ended 74.31, weaker by 19 paise from its previous close of 74.12 on Friday.

The FIIs as per Monday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 9353.78 crore against gross selling of Rs 7758.88 crore, while in the debt segment, the gross purchase was of Rs 1073.09 crore with gross sales of Rs 1120.43 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.89 crore against gross selling of Rs 10.53 crore.

The US markets ended lower on Monday as big technology companies such as Apple and Microsoft take losses. Asian markets are trading in red on Tuesday following overnight losses on Wall Street. Indian markets made a comeback on Monday following four trading sessions of losses, helped by buying across most sectors despite losses in global markets. Today, the start of session is likely to negative tracking sell-off in the global markets. Also, investors will be eyeing the Services PMI data to be out later in the day for further direction. Traders may take note of report that the 5th Annual Co-ordination meeting between Director General, Sashastra Seema Bal and Nepal's Armed Police Force (APF) Inspector General will be held from October 5 to 7, 2021 in New Delhi. The 12-member SSB delegation will be led by DG Kumar Rajesh Chandra while the nine-member Nepalese side will be headed by the APF's IG Shailendra Khanal. Also, the government has announced imposing export curbs on syringes with immediate effect, a move aimed at discouraging outbound shipments of the product in view of the present Covid-19 pandemic situation. However, some respite may come later in the day as Economic Affairs Secretary Ajay Seth said India has got on the path of economic recovery aided by various government reforms in the last seven years under Prime Minister Narendra Modi's leadership. Notwithstanding the pandemic, he said the government continued with the reform process and many strategic reforms were announced even during Covid-19. There will be some buzz in the power stocks as rating agency Ind-Ra said short-term power prices are likely to remain elevated in the near term on account of a continued increase in imported coal prices. Gold and jewelry related stocks will be in focus as India's gold imports in September soared 658% from last year's lower base as a correction in local prices to the lowest level in nearly six months prompted jewellers to step up purchases for the upcoming festive season. Aviation industry stocks will be in limelight as industry's main lobby IATA said airline losses from the coronavirus pandemic are set to surpass $200 billion as travel curbs weigh on corporate and long-haul demand well into 2022. There will be some reaction in steel industry stocks as India Ratings and Research (Ind-Ra) maintained a stable outlook on the domestic steel sector for 2HFY22.

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

Nifty Top volumes

• Reliance Industries has incorporated a wholly-owned subsidiary namely Reliance International in Abu Dhabi Global Market, the UAE to undertake activities relating to, amongst others, trading of crude oil, petroleum products, petrochemicals, and agricultural commodities. 
• Tech Mahindra is planning to acquire IT consultancy service provider Beris Consulting Gmbh for 7 million euro or about Rs 60 crore through its German subsidiary. 
• Cipla and Eli Lilly and Company (India) have entered into strategic partnership in India to enhance the reach of Lilly's Diabetes products -- Humalog.  
• Coal India's coal production has registered a marginal rise to 40.7 million tonnes (MT) in September, 2021.