Extending the winning streak on third consecutive session, Indian equity benchmarks ended at fresh record closing highs on Monday, on the back of a rally in banking stocks after HDFC Bank announced better-than-expected Q1 results. The markets opened marginally higher and extended the gains as the day progressed, as the Reserve Bank of India said India's foreign exchange reserves jumped $1.229 billion to $596.28 billion in the week ended July 7. Traders found solace with Union Minister Rajeev Chandrasekhar hailing India's remarkable progress in building unicorns and startups and prophesized that the next 4-5 years will witness substantial growth for such enterprises and the startups in the country will increase by 10 times. Some support also came with IMF stating that India has taken a very proactive approach toward making progress on the priorities of the G20 and its presidency's key priorities are enhancing financing for global public goods and strengthening macroeconomic coordination. Markets extended gains in second half of trading session, as sentiments remained upbeat with the data from the National Securities Depository (NSDL) showing that foreign portfolio investors (FPIs) have remained net buyers in Indian stock markets for the fifth straight month. FPIs bought Indian stocks worth Rs 7,936 crore, Rs 11,631 crore, Rs 43,838 crore, and Rs 47,148 crore in March, April, May, and June, respectively. In July too they have been firm and so far in the month infused funds worth Rs 30,660 crore. Meanwhile, with an aim to increase circulation of the rupee in the Gulf region, the Reserve Bank of India (RBI) has inked two memoranda of understandings (MoUs) with the Central Bank of UAE (CBUAE) in Abu Dhabi for establishing a Framework to Promote the Use of Local Currencies viz. the Indian rupee (INR) and the UAE Dirham (AED) for cross-border transactions; and cooperation for interlinking their payment and messaging systems. Finally, the BSE Sensex rose 529.03 points or 0.80% to 66,589.93 and the CNX Nifty was up by 146.95 points or 0.75% to 19,711.45.

The US markets ended higher on Monday. The strength on markets partly reflected recent upward momentum, as encouraging inflation data has added to optimism about the outlook for interest rates ahead of next week's Federal Reserve meeting. While the Fed is widely expected to raise rates by another quarter point, traders are hopeful that will mark the final rate hike.  On the sectoral front, Semiconductor stocks moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 2.3 percent to its best closing level in over a year. Notable strength also emerged among banking stocks, as reflected by the 1.1 percent gain posted by the KBW Bank Index. On the other hand, telecom stocks extended last Friday's sell-off, dragging the NYSE Arca North American Telecom Index down by 4.5 percent to a three-year intraday low. Shares of A&T (T) plummeted by 4.5percent after Citi downgraded its rating on the telecom giant's stock to Neutral from Buy. On the economic data front, after reporting a significant turnaround in New York manufacturing activity in the previous month, the Federal Reserve Bank of New York released a report showing a pullback in the pace of growth in the month of July. The New York Fed said its general business conditions index fell to 1.1 in July after surging to 6.6 in June, although a positive reading still indicates growth. Street had expected the index to drop to zero. The pullback by the headline index was partly due to a notable slowdown in the pace of shipment growth, as the shipments index tumbled to 13.4 in July from 22.0 in June. On the other hand, the number of employees index jumped to a positive 4.7 in July from a negative 3.6 in June, returning to positive territory for the first time since January. The new orders index also crept up to 3.3 in July from 3.1 in June, while the unfilled orders index slipped to a negative 8.8 in July from a negative 8.0 in June, indicating unfilled orders continued to decline.

Crude oil futures ended deeply in red on Monday on concerns about outlook for energy demand after data showed the Chinese economy grew at slower than expected pace in the second quarter. Official data showed that the Chinese economy grew just 0.8% in the June quarter, down from 2.2% in the first three months of 2023. Other reports on industrial output, retail sales, fixed asset investment and unemployment proved to be a mixed bag, raising concerns about an uneven economic recovery in the world's largest crude importer. Besides, in Libya, two of the three oil fields, including the country's second-largest, Sharara, have resumed production over the weekend, after having halted work due to protests. Benchmark crude oil futures for August delivery fell $1.27 or about 1.7 percent to settle at $74.15 a barrel on the New York Mercantile Exchange. Brent crude for September delivery declined $1.37 or about 1.71 percent to settle at $78.50 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against dollar on Monday, as domestic equity benchmarks scaling all-time high levels and weakness in the American currency overseas boosted investor sentiments. Besides, steady foreign fund inflows into domestic capital markets also supported the local unit. Traders got support as the Reserve Bank of India said India's foreign exchange reserves jumped $1.229 billion to $596.28 billion in the week ended July 7. On the global front, dollar edged lower on Monday against a basket of currencies after suffering its biggest weekly drop of the year as traders waited on economic data and policy decisions before selling it down any further. Finally, the rupee ended at 82.05 (Provisional), stronger by 12 paise from its previous close of 82.17 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 12814.46 crore against gross selling of Rs 9535.59 crore, while in the debt segment, the gross purchase was of Rs 464.08 crore with gross sales of Rs 423.44 crore. Besides, in the hybrid segment, the gross buying was of Rs 14.48 crore against gross selling of Rs 10.95 crore

The US markets ended higher on Monday, led by gains in financial and technology stocks. Asian markets are trading mostly in red on Tuesday as investors await the release of minutes of the Reserve Bank of Australia's July policy meeting. Indian markets hit new all-time highs and ended with notable gains on Monday mainly on account of late hour buying. Today, markets are likely to get flat-to-positive start tracking overnight gains on Wall Street. Investors will be eyeing Q1FY24 results for more cues. Foreign fund inflows likely to support domestic sentiments. Foreign institutional investors (FII) net purchased shares worth net Rs 73 crore on July 17. Some support will come as Federation of Indian Chambers of Commerce & Industry's (Ficci's) latest quarterly survey on manufacturing reveals that sentiment is positive during the first quarter (Q1). Traders may take note of a paper authored by officials with the Reserve Bank of India (RBI) Economic Research Department stating that India's real gross domestic product (GDP) would need to grow at 7.6% annually over the next 25 years, which will entail raising the current per capita GDP from $2,500 currently to $22,000, if the country wants to become an advanced economy. Besides, the government has simplified norms for exporters to avail benefits of an advance authorisation scheme under which free imports of input materials are allowed. Meanwhile, a Niti Aayog report said India witnessed 13.5 crore people moving out of multidimensional poverty between 2015-16 and 2019-21 with fastest reduction in Uttar Pradesh, Bihar, Madhya Pradesh, Odisha and Rajasthan. However, there may be some cautiousness as RBI' monthly bulletin noted that the Gross foreign direct investments (FDI) into India moderated to $ 12.2 billion in April-May 2023, from $ 16.5 billion in April-May 2022. Gross FDI had moderated from $ 84.8 billion in FY22 to $ 71.4 billion in FY23. Gold jewellery related stocks will be in focus as the government clarified that import restrictions on certain gold jewellery and articles are not applicable for units in the special economic zones (SEZs). On July 12, the government, through a notification, imposed these restrictions on certain gold jewellery and articles. Furthermore, the National Stock Exchange of India will conduct a special pre-open session for Reliance Industries (RIL) stock on July 20, on account of the demerger of the financial services business of the company.

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

Nifty Top volumes

• HDFC Bank has reported 28.98% rise in its consolidated net profit at Rs 12403.25 crore for Q1FY24 as compared to Rs 9616.67 crore for the same quarter in the previous year. 
• Dr. Reddy's Laboratories has entered into a Security Subscription and Shareholders' agreement for consumption and supply of renewable energy, with TEQ Green Power XI and O2 Power SG Pte, for investment in O2 Renewable Energy IX (SPV).
• Larsen & Toubro's construction arm -- L&T construction has secured new orders for its Water & Effluent Treatment Business. 
• Nestle India has received approval from The Industrial Promotion & Investment Corporation of Odisha for setting up a food processing unit at Mundaamba, Block - Jankia in the district of Khordha (Odisha) with an investment of about Rs 894.10 crore.