In a volatile session, Indian equity benchmarks trimmed some of their initial gains but managed to end at record closing high on Monday, on the back of largely positive trend in global markets. Markets made optimistic start, as the country's index of industrial production (IIP) grew 3.6 percent to 128.5 in the month of October with recovery in manufacturing, consumer goods and power sectors. Some support also came with Prime Minister Narendra Modi stating that economic indicators have shown encouraging signs of recovery of the Indian economy post-pandemic. In this time of pandemic, he said, the government has accorded highest priority to saving lives of Indians and the way India has handled the crisis through concerted effort has surprised the world. However, Indian equities erased all gains to turn negative in afternoon deals, as the Wholesale Price Index (WPI) based inflation rose to 1.55 percent in November, as against 1.48 percent in October. WPI inflation in October 2020 was at an eight-month high as manufactured products turned costlier. November 2019 WPI inflation was at 0.58 percent, due to increase in prices of food articles. Some anxiety came with Former chief statistician Pronab Sen's statement that at the moment India's current macroeconomic situation is very uncertain and the country's Gross domestic product (GDP) could contract closer to 10 percent in the current fiscal (FY21). He also said that although the overall macro management of the economy by the government has not been very good but this particular slowdown is really beyond its control. But, local gauges regained their positive momentum in late afternoon session, taking support from Economic Affairs Secretary Tarun Bajaj's statement that the government is cautiously optimistic on the economic front and will continue to take measures to push growth. Finally, the BSE Sensex rose 154.45 points or 0.34% to 46,253.46, while the CNX Nifty was up by 44.30 points or 0.33% to 13,558.15.

The US markets ended mostly lower on Monday as amid concerns about the impact of new lockdown measures as the coronavirus death toll in the US reached 300,000. New York Governor Andrew Cuomo and New York City Mayor Bill de Blasio have both warned that the city could be headed for another full shutdown unless the second wave of coronavirus infections is contained. The warnings about a new round of shutdowns come despite the approval of the coronavirus vaccine developed by Pfizer and BioNTech. The CDC signed off on the vaccine following the Emergency Use Authorization issued by the FDA. Pfizer has commenced the first shipments of the vaccine to distribution centers across the country. The vaccine news contributed to the initial strength on markets along with continued optimism about a new fiscal stimulus bill, with a private report detailing efforts to pass a previously unveiled $908 billion bipartisan relief plan. It said the package will be split into two proposals that could be voted on separately in order to win approval. It said one bill would be a $748 billion measure including money for small businesses, the jobless and COVID-19 vaccine distribution, while the other would include more controversial measures such as liability protections for business and aid for state and local governments.

Crude oil futures ended higher on Monday amid hopes the rollout of a Covid-19 vaccine will help revive the economy and result in increased energy demand. The United States has begun giving Covid-19 vaccine shots and vaccinations were rolling out across the country starting Monday, with hospitals prioritizing front-line healthcare workers. This follows the Centers for Disease Control and Prevention giving its nod for Pfizer-BioNTech's COVID-19 vaccine. However, the Organization of the Petroleum Exporting Countries (OPEC) lowering its energy demand forecast for 2020 and 2021 weighed on oil prices and limited their upside. Crude oil futures for January gained $0.42 or 0.9 percent to settle at $46.99 a barrel on the New York Mercantile Exchange. February Brent crude rose $0.28 or 0.56 percent to settle at $50.25 a barrel on London's Intercontinental Exchange.

Rising for the second consecutive day, Indian rupee ended higher against dollar on Monday due to fresh selling of the American currency by banks and exporters. Sentiments got boost as the country's index of industrial production (IIP) grew 3.6 per cent to 128.5 in the month of October, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI). However, upside remain capped as the Wholesale Price Index (WPI) based inflation rose to 1.55 percent in November, as against 1.48 percent in October. On the global front, dollar fell at the open of European trade on Monday, with progress on COVID-19 vaccines lifting risk appetite, while the British pound rose more than 1% after Britain and the European Union agreed on Sunday to carry on with Brexit negotiations. Finally, the rupee ended at 73.55, 9 paise stronger from its previous close of 73.64 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 11079.43 crore against gross selling of Rs 6042.01 crore, while in the debt segment, the gross purchase was of Rs 3037.22 crore with gross sales of Rs 637.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 27.66 crore against gross selling of Rs 25.54 crore.

The US markets ended mostly lower on Monday as fears of additional Covid-19 restrictions offset the optimism around a vaccine rollout. Asian markets are trading in red on Tuesday as concerns over a coronavirus surge in multiple countries dulled optimism over the vaccine rollout in the US. Indian markets ended higher on Monday on the back of gains in banks, metals, pharma and FMCG stocks. Today, the markets are likely to make negative start tracking weakness in global peers. There will be some cautiousness as India's Covid-19 caseload now stands at 99.06 lakh and the death toll has mounted to 1.43 lakh. However, some respite may come later in the day with the government data showing that retail Inflation has eased marginally to 6.93% in November due to considerable easing in vegetable prices. Retail inflation had remained above 7 per cent for two month in a row. Some support may come as rating agency CRISIL projected a slower contraction of 7.7% for the Indian economy in the ongoing fiscal, compared to the 9% forecast in September on the back of faster-than-expected recovery in the second quarter, but called for more fiscal measures to sustain it. Market participants may take note of report that India has released detailed guidelines for COVID-19 mass vaccination drive that will begin soon. The central government is planning to vaccinate nearly 30 crore people during the first phase of vaccination. Pfizer, Serum Institute of India and Bharat Biotech have applied for market authorisation for their vaccines. The vaccination drive will start once India approves emergency use of COVID-19 vaccine. There will be some buzz in metal stocks as rating agency Icra upgraded its outlook for the Indian steel sector to stable on the back of improving demand and prices. It said the domestic steel sector has witnessed a strong revival in second quarter of 2020-21. Financial stocks will be under investor radar as the Supreme Court today resumes hearing in the interest waiver case. There will be some reaction in NBFCs stocks with a private report showing that Non-Banking Financial Companies (NBFCs) are expecting higher credit loss as well as an increase in provision coverage rates, mainly due to the impact of the coronavirus pandemic. Meanwhile, Mrs Bectors Food Specialities IPO is scheduled to open for subscription on Tuesday. The Rs 540-crore public issue will be sold in the price band of Rs 286-288 apiece. The IPO would consist of a fresh issue of Rs 41 crore and an offer-for-sale (OFS) of Rs 500 crore by the existing PE investors.

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

Nifty Top volumes

• L&T's construction arm -- L&T construction has secured orders from prestigious clients for two of its businesses. 
• IOC has launched the newly christened Chhotu 5 kg cylinders, which have been made available pan-India. 
• Infosys has entered into a strategic partnership with El Paso Water to transform its legacy CIS with Oracle Utilities Customer to Meter. 
• Coal India is in favour of tweaking its e-auction policy to broaden its customer base and maintain a steady bottomline.