Indian equity benchmarks snapped their 2-day losing streak and ended higher with gains of around half percent on Monday, aided by buying across Utilities, Power and Metal stocks. Benchmarks made a cautious start amid foreign fund outflows. Foreign institutional investors (FII) sold shares worth net Rs 266.98 crore on August 18. Some cautiousness also came in as retail inflation for farm and rural workers inched up to 7.43 per cent and 7.26 per cent in July compared to 6.31 per cent and 6.16 per cent, respectively, in June this year, mainly due to higher prices of certain food items. However, markets soon gained traction as traders got support after Moody's Investors Service affirmed India's sovereign rating at Baa3 with stable outlook and said high growth will support a gradual increase in income levels, which will further contribute to economic strength. It expects India's economic growth to outpace all other G20 economies through at least the next two years, driven by domestic demand. Markets extended gains in second half of trading session, as sentiments remained up-beat with latest data by the Reserve Bank of India showing that India's foreign exchange reserves snapped a three-week losing streak and increased by $708 million to $602 billion in the week ended August 11. The rise in the reserves was mainly on account of an increase in the foreign currency assets, which grew by $999 million to $534 billion in the previous week. Some optimism also came with Minister of State for Road Transport, Highways and Civil Aviation Gen V K Singh stating that with the Centre's focus on development and infrastructure, India has gained the trust of many countries, which have come forward to invest in the country. Additional support also came with report stating that a healthy growth in India's services segments has helped the country's total exports and imports of goods and services to cross the $800 billion mark during the first half of 2023, despite a slowdown in global demand. Finally, the BSE Sensex rose 267.43 points or 0.41% to 65,216.09 and the CNX Nifty was up by 83.45 points or 0.43% to 19,393.60.

The US markets ended mostly higher on Monday. Technology stocks helped lead the rebound, resulting in a substantial gain by the Nasdaq. The spike by the Nasdaq came as traders picked up tech stocks at reduced levels following recent weakness, with the index bouncing off its lowest closing level in two months. Cybersecurity company Palo Alto Networks (PANW) posted a standout gain after reporting better than expected fiscal fourth quarter earnings. However, a steep drop by Johnson & Johnson contributed to the dip by the Dow, with the healthcare giant slumping by 3.0 percent. Meanwhile, trades continued to look ahead to the economic summit in Jackson Hole, Wyoming, where major central bankers are congregating later in the week to deliberate on monetary policy. Federal Reserve Chair Jerome Powell is scheduled to speak on the economic outlook before the Jackson Hole Economic Symposium on Friday. On the sectoral front, semiconductor stocks moved sharply higher over the course of the session, resulting in a 2.8 percent spike by the Philadelphia Semiconductor Index. significant strength also emerged among software stocks, as reflected by the 1.8 percent jump by the Dow Jones U.S. Software Index. Biotechnology and computer hardware stocks also turned in strong performances on the day, contributing to the surge by the Nasdaq.

Crude oil futures settled lower on Monday on concerns about the outlook for energy demand due to a slowing Chinese economy. Meanwhile, traders were focusing on preliminary U.S. August PMI data and the Federal Reserve's annual economic symposium at Jackson Hole both due later this week. However, the extension of production cuts by OPEC and allies helped limit the downside in oil prices. Benchmark crude oil futures for September delivery fell $0.53 or about 0.7 percent to settle at $80.72 a barrel on the New York Mercantile Exchange. Brent crude for October delivery declined $0.54 or 0.7 percent to settle at $80.12 a barrel on London's Intercontinental Exchange.

The Indian rupee ended weaker against the US dollar on Monday weighed down by a surge in crude oil prices and selling pressure by foreign investors. Traders were cautious as retail inflation for farm and rural workers inched up to 7.43 per cent and 7.26 per cent in July compared to 6.31 per cent and 6.16 per cent, respectively, in June this year, mainly due to higher prices of certain food items. Investors overlooked report stating that Moody's Investors Service affirmed India's sovereign rating at Baa3 with stable outlook and said high growth will support a gradual increase in income levels, which will further contribute to economic strength. It expects India's economic growth to outpace all other G20 economies through at least the next two years, driven by domestic demand. On the global front, the dollar held firm on Monday following five straight weeks of gains, as investors looked ahead to the Federal Reserve's Jackson Hole symposium for guidance on where rates might settle when the dust of this hiking cycle clears. Finally, the rupee ended at 83.13 (Provisional), weaker by 3 paise from its previous close of 83.10 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 12347.08 crore against gross selling of Rs 11772.23 crore, while in the debt segment, the gross purchase was of Rs 1721.26 crore with gross sales of Rs 334.41 crore. Besides, in the hybrid segment, the gross buying was of Rs 35.21 crore against gross selling of Rs 14.31 crore.

The US markets ended mostly higher on Monday as investors were optimistic ahead of its earnings this week, and other technology-related stocks gaining. Asian markets are trading mostly in green on Tuesday tracking overnight gains on Wall Street. Indian markets ended higher on Monday even as global cues remained jittery. Buying was visible in IT, financial and power and Adani Group stocks. Today, domestic indices are likely to get flat-to-negative start amid lackluster global cues after the US 10-year bond yield surged. Foreign fund outflows likely to dent sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 1,901.10 crore on August 21. Traders will be concerned as think tank Global Trade Research Initiative (GTRI) said India's exports and imports of goods and services declined 2.5% on-year in January-June 2023 at $800.9 billion. Exports of goods and services rose 1.5% to $385.4 billion in the first six months of the calendar year as against $379.5 billion in the corresponding period a year ago while imports dipped 5.9% to $415.5 billion from $441.7 billion in January-June 2022. However, some support may come as the latest payroll data released by the Employees' Provident Fund Organisation (EPFO) showed that the number of fresh formal jobs increased for the third consecutive month in June to hit a 9-month high, thus signalling a sustained recovery in the labour markets in the first quarter of financial year 2023-24 (FY24). Traders may take note of a private report that the value of foreign portfolio investors' holdings in the domestic equities reached $626 billion in the three months ended June 2023, which was 20 per cent higher from the year-ago period. Besides, global industry body WFDSA said India has moved up to 11th position in the ranking of top markets of direct sellers, with retail sales of $3.23 billion (around Rs 26,852 crore) in 2022. Telecom stocks will be in focus as the government data showed that the telecommunications (telecom) sector witnessed a 2.53 per cent sequential growth in adjusted gross revenue (AGR), reaching Rs 64,494 crore in the January-March quarter (fourth quarter, or Q4) of 2022-23 (FY23).

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

Nifty Top volumes

• Hero MotoCorp is eyeing at sustainable growth, enhancing market share across segments on the back of new product launches over the next few quarters. 
• ONGC's overseas arm -- ONGC Videsh has secured another three-year extension to explore oil and gas in a Vietnamese block in the contested waters of the South China Sea. 
• Bajaj Finance has raised Rs 304.21 crore through the allotment of 3,000 Secured Redeemable NCDs, at the face value of Rs 10 lakh each on Private Placement basis. 
• SBI Life Insurance Company has launched its dedicated 24X7 inbound contact centre to address before and after purchase queries related to comprehensive insurance solutions provided by the company.