Monday's trading session ended in red terrain, with both Sensex and Nifty settling with a cut of 168.21 and 61.75 points respectively, amid rising oil prices and caution ahead of more corporate earnings this week. After a firm start of the day, key indices traded higher in early deals, mirroring positive cues from global markets. Some support came in with a private report stating that industry leaders have expressed confidence in India's economy being resilient in the face of global headwinds in uncertainties, with the Confederation of Indian Industries' Business Confidence Index achieving its highest reading in two years for the October-December quarter. However, markets erased gains in late morning deals and remained weak till the end, on the back of selling at Metal & Telecom counters. Traders got worried after India's December 2022 trade deficit rose 12.8% at $23.76 billion as against $21.10 billion December 2021. India's exports declined around 12% on a year-on-year basis to $34.48 billion in December 2022 as against $39.27 billion in the same month last year. Besides, economic think tank Global Trade Research Initiative (GTRI) said that regulatory and internal market barriers of China are some of the major impediments which impact India's exports to that country.  Some cautiousness also came with report that foreign investors offloaded around Rs 15,000 crore worth of Indian equities in the first two weeks of January amid risks of Covid in some parts of the world and recession worries in the US. Also, the Reserve Bank said India's forex reserves declined by $1.268 billion to $561.583 billion for the week ended January 6. Easing inflation data failed to boost sentiments over the street during the day. India's inflation based on wholesale price index (WPI) eased further to 4.95% (Provisional) for the month of December 2022 as against 5.85% recorded in November 2022 and 8.39% in October 2022. Finally, the BSE Sensex fell 168.21 points or 0.28% to 60,092.97 and the CNX Nifty was down by 61.75 points or 0.34% to 17,894.85.

The US markets closed in Monday on account of Martin Luther King Jr. Day.

Indian rupee ended lower against dollar tracking muted trend in domestic equities. Traders got worried after India's December 2022 trade deficit rose 12.8% at $23.76 billion as against $21.10 billion December 2021. India's exports declined around 12% on a year-on-year basis to $34.48 billion in December 2022 as against $39.27 billion in the same month last year. Traders ignored a report stating that India's inflation based on wholesale price index (WPI) eased further to 4.95% (Provisional) for the month of December 2022 as against 5.85% recorded in November 2022 and 8.39% in October 2022. On the global front, dollar started the week on the back foot, hitting a seven-month low against a basket of major peers in Asian trade, with the yen in particular focus as traders ramped up bets the Bank of Japan will tweak its yield control policy further. Finally, the rupee ended at 81.59 (Provisional), weaker by 21 paise from its previous close of 81.38 on Friday.

The FIIs as per Monday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 6845.25 crore against gross selling of Rs 10584.74 crore, while in the debt segment, the gross purchase was of Rs 1781.66 crore against gross selling of Rs 586.32 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.14 crore against gross selling of Rs 7.47 crore.

The US markets remained closed on Monday for the Martin Luther King Jr holiday. Asian markets are trading mixed on Tuesday as investors await the gross domestic product (GDP) data for China. Indian markets ended Monday's session slightly lower despite positive cues from global markets and easing India's WPI inflation. Today, the markets are likely to get cautious start amid mixed Asian cues. Traders will be concerned as India's exports contracted 12.2 per cent to $34.48 billion in December 2022, mainly due to global headwinds, and the trade deficit widened to $23.76 billion during the same period. Imports in December 2022 also declined 3.5 per cent to $58.24 billion as against $60.33 billion in the year-ago period. Also, continued selling by foreign investors may dampen sentiments in domestic markets. Foreign institutional investors (FIIs) net sold shares worth Rs 750.59 crore, continuing selling for the 17th consecutive session on January16, according to the provisional data available on the NSE. However, some support may come with a private report that nearly six in 10 corporate heads in India (57 per cent) are optimistic about the country's growth prospects in 2023 in the face of a global slowdown, as well as inflationary and geopolitical concerns. Traders may take note of the Reserve Bank of India (RBI) in a report on state finances stating that the fiscal health of state governments has shown improvement after a sharp deterioration induced by the pandemic in 2020-21. Meanwhile, the World Economic Forum in its Chief Economists Outlook survey said that a global recession is likely in 2023, but pressures on food, energy and inflation may be peaking. It added at the same time, some economies in the South Asia region, including Bangladesh and India, may bene?t from global trends such as a diversi?cation of manufacturing supply chains away from China. There will be some buzz in the oil and aviation industry stocks with report that India has cut its windfall tax on crude oil and exports of aviation turbine fuel (ATF) and diesel. It cut its windfall tax on crude to 1,900 rupees ($23.28) per tonne from 2,100 rupees per tonne, effective January 17. There will be some reaction in insurance industry stocks with report that the Insurance Regulatory and Development Authority of India has said insurers will be allowed to classify their sovereign green bond purchases as infrastructure investments. There will be lots of earnings announcements too, to keep the markets in action.

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

Nifty Top volumes

• L&T's construction arm -- L&T construction has secured a significant repeat order for its Buildings & Factories Fast Business from a reputed and prestigious commercial developer. 
• Bharti Airtel has launched its cutting edge 5G services in Agra, Meerut, Gorakhpur, Kanpur, Prayagraj.
• HDFC Bank has reported rise of 19.97% in its consolidated net profit at Rs 12735.43 crore for Q3FY23 as compared to Rs 10615.77 crore for the same quarter in the previous year. 
• Maruti Suzuki India has increased prices across models.