Indian equity benchmarks closed higher for the second straight session on Monday, boosted by buying in index heavyweights Mahindra & Mahindra, Axis Bank and Tata Motors amid a positive trend in global markets. Markets made a positive start and stayed in green for whole day, on account of value buying coupled with continued FPI inflows. Foreign Portfolio Investors (FPIs) pumped in Rs 43,838 crore in Indian equities in May, the highest level in nine months, supported by strong macroeconomic fundamentals, and reasonable valuations. Sentiments got a boost as CII President R Dinesh said private sector investment is set to witness a significant increase, as capacity utilisation in several key sectors has already crossed 80 per cent and economic growth is estimated to be 6.7 per cent in the current financial year. Traders took support with a private report that India's manufacturing, agriculture, and services sector activities are likely to sustain growth in FY24 on the back of private investments and improved high-frequency data, although headwinds of slowing exports, a global slowdown, and monsoon uncertainty may continue. Firm trade continued over the Dalal Street in afternoon deals, taking support from Secretary in the department for promotion of industry and internal trade (DPIIT) Rajesh Kumar Singh's statement that an inter-ministerial consultation is going on to frame an e-commerce policy which would help in providing a conducive environment for inclusive and harmonious growth of the sector. Traders took a note of report that India's service Purchasing Managers' Index (PMI) was recorded at 61.2 in May. Although it is lower than 62 in April, May's figure is the second-highest since June 2010. A print above 50 in the survey denotes expansion of services activity, and below that suggests contraction. India's headline figure has been in the expansion zone for 23 months since August 2021. However, markets trimmed some gains in final minutes of trade, as some concern came with report that India's forex reserves dropped by $4.339 billion to $589.138 billion for the week ended May 26. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments. Finally, the BSE Sensex rose 240.36 points or 0.38% to 62,787.47 and the CNX Nifty was up by 59.75 points or 0.32% to 18,593.85.

The US markets ended lower on Monday as some traders looked to take a break to assess the outlook for the markets following the strong upward move seen last Thursday and Friday. Further, trading activity remained subdued as traders looked ahead of Federal Reserve meeting. On the sectoral front, most of the major sectors showed only modest moves on the day, although considerable weakness was visible among networking stocks. The NYSE Arca Network Index tumbled by 2.1 percent after ending last Friday's trading at its best closing level in well over a month. Oil service stocks also saw considerable weakness despite an increase by the price of crude oil, dragging the Philadelphia Oil Service Index down by 1.9 percent.  Stock specific development, Apple lost about 0.8%, retreating from all-time highs touched earlier in the session. The iPhone maker unveiled its highly anticipated virtual reality headset and a slew of software updates at its annual Worldwide Developers Conference. On the economic data front, the Institute for Supply Management (ISM) released a report showing service sector activity in the U.S. saw only modest growth in the month of May, with the index of activity in the sector falling by more than expected. The ISM said its services PMI fell to 50.3 in May from 51.9 in April, although a reading above 50 still indicates growth in the sector. Street had expected the index to edge down to 51.5. A separate report released by the Commerce Department showed new orders for U.S. manufactured goods increased by slightly less than expected in the month of April. The report said factory orders rose by 0.4 percent in April after climbing by a downwardly revised 0.6 percent in March. Street had expected factory orders to climb by 0.5 percent compared to the 0.9 percent advance originally reported for the previous month.

Crude oil futures ended higher on Monday after Saudi Arabia, the world's largest crude exporter, pledged to cut its production by another 1 million barrels per day in July. Saudi Arabia will reduce its output to 9 million bbl/day in July from about 10 million bbl/day in May, its largest cut in years. Besides, a broader OPEC+ deal to limit supply into 2024, encouraging service sector activity data from China and the signing of a legislation by U.S. President Joe Biden to raise the nation's debt ceiling contributed as well to the rise in oil prices. Benchmark crude oil futures for July delivery rose $0.41 or about 0.6 percent to settle at $72.15 a barrel on the New York Mercantile Exchange. Brent crude for August delivery surged $0.63 or 0.83 percent to settle at $76.71 a barrel on London's Intercontinental Exchange.

The Indian rupee ended weaker against the US dollar on Monday, weighed down by the strength of the American currency in the overseas market. Traders were worried after India's forex reserves dropped by $4.339 billion to $589.138 billion for the week ended May 26. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments. Traders took a note of report that India's service Purchasing Managers' Index (PMI) was recorded at 61.2 in May. Although it is lower than 62 in April, May's figure is the second-highest since June 2010. A print above 50 in the survey denotes expansion of services activity, and below that suggests contraction. On the global front, dollar edged up against major peers on Monday, as markets priced in around a 1-in-4 chance of the U.S. Federal Reserve raising benchmark rates this month after robust jobs data on Friday. Finally, the rupee ended at 82.68 (Provisional), weaker by 29 paise from its previous close of 82.39 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 11666.02 crore against gross selling of Rs 11022.87 crore, while in the debt segment, the gross purchase was of Rs 512.62 crore against gross selling of Rs 192.71 crore. Besides, in the hybrid segment, the gross buying was of Rs 994.02 crore against gross selling of Rs 36.21 crore.

The US markets ended lower on Monday after data showed growth slowed in the country's services sector in May and new orders for manufactured goods rose by slightly less than expected in April. Asian markets are trading mostly in green on Tuesday on account of bargain hunting. Indian markets retreated from their intraday highs but ended with decent gains on Monday as investors cheered the signing of the US debt ceiling bill into a law. Today, markets are likely to get cautious start amid mixed global cues and overnight rise in crude oil prices. Foreign fund outflows likely to dent domestic sentiments. Provisional data from the National Stock Exchange showed that foreign institutional investors (FIIs) sold shares worth Rs 700.98 crore on June 5. There will be some cautiousness with report that India's monsoon onset over the southernmost Kerala coast is delayed by another two-three days because the formation of cyclonic circulation in the Arabian Sea has reduced cloud cover over the Kerala coast. The market participants likely to remain on sidelines as the Monetary Policy Committee (MPC) of the Reserve Bank of India begins its bimonthly meeting today i.e. June 6. There are expectations that the interest rate will remain unchanged. However, some support may come later in the day with a private report that India, along with Southeast Asian countries such as Indonesia, is expected to sustain growth in the medium-term in Asia region, replacing China as the key growth driver. Besides, the government has mopped up Rs 4,185 crore through a three per cent stake sale in state-run Coal India. The holding of the government has come down to 63.13 per cent in the coal producer after the offer-for-sale (OFS). Oil & gas sector relates stocks will be in focus as crude oil prices rose after the world's top exporter Saudi Arabia pledged to cut production by a further 1 million barrels per day (bpd) from July to counter macroeconomic headwinds that have depressed markets. There will be some reaction in tea industry stocks as tea production in calendar 2022 increased to 1,365 million kilogrammes, a tad higher from the previous year which stood at 1,330 million kilogrammes in 2021. As per the latest data of the Tea Board, production at the North India gardens stood at 1133.35 million kilogrammes, while it was 231.99 million kilogrammes in South India. Moreover, the three-day initial public offering (IPO) of Ikio Lighting will open for subscription today, and close on Thursday, June 8. Shares of the lighting solutions provider will be available in the range of Rs 270-Rs 285 per share.

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

Nifty Top volumes

• Tata Motors is looking to introduce new products including CNG and electric models, while bolstering its existing range with new interventions. 
• M&M is looking at maintaining leadership position in the fast growing sports utility vehicle segment in the current fiscal with demand remaining robust for its model range. 
• Hero MotoCorp has increased price of its electric scooter VIDA V1 Pro by around Rs 6,000 to offset the impact of curtailed subsidy structure on electric two-wheelers coming into effect from June 1. 
• NTPC's wholly owned subsidiary -- NTPC Green Energy has incorporated a new company, in 50:50 joint venture with Indian Oil Corporation (IOC), in the name of Indianoil NTPC Green Energy.