Indian benchmark indices ended the Monday's trade deep in red terrain with frontline gauges settling below their crucial 58,000 (Sensex) and 17,350 (Nifty) levels, amid global sell off. Sentiments remained dampened since beginning as key gauges made a gap-down start. Investors' sentiments took a hit as the Reserve Bank of India (RBI) data showed that the country's foreign exchange reserves fell $6.687 billion to $564.053 billion in the week ended August 19. In the previous week ended August 12, the reserves declined $2.238 billion to $570.74 billion. Traders were worried as Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra has said that in the near-term, inflation trajectory continues to be ‘heavily contingent' upon the evolving geopolitical developments, international commodity prices and global financial sector developments. Sentiments also got hurt with the Ministry of Statistics and Programme Implementation in its latest report for July 2022 has said that as many as 386 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.7 lakh crore. According to the Ministry, which monitors infrastructure projects of Rs 150 crore and above, out of 1,505 projects, 386 reported cost overruns and as many as 661 projects were delayed. Some concern also came as exchange data showed foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 51.12 crore on Friday. Market participants paid no heed towards Finance Minister Nirmala Sitharaman's statement that the Indian economy will grow at 7.4 per cent in this fiscal (FY23) and continue at the same level in the next fiscal as well. She added the International Monetary Fund and the World Bank have projected India's growth to be the fastest for the next two fiscal years, and their estimates are in sync with that of the Reserve Bank of India as well. Finally, the BSE Sensex fell 861.25 points or 1.46% to 57,972.62 and the CNX Nifty was down by 246.00 points or 1.40% to 17,312.90.

The US markets ended in red on Monday, following the sell-off seen in last session. Concerns about the outlook for interest rates continued to weigh on the markets following Federal Reserve Chair Jerome Powell's speech at the Jackson Hole economic symposium. Powell's remarks were more hawkish than investors would have liked, signaling the Fed is likely to continue raising interest rates aggressively and maintain rates at a high level for an extended period. The subsequent weakness on markets reflects concerns the Fed's battle against inflation will led to a continued slowdown by the economy. Besides, Monday's stock moves also coincided with the yield on the 2-year Treasury note notching a fresh 15-year high as rate hike fears persisted. On the sectoral fronts, semiconductor stocks showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 1.9 percent to its lowest levels in over a month. Considerable weakness was also visible among pharmaceutical stocks, as reflected by the 1.3 percent drop by the NYSE Arca Pharmaceutical Index. Computer hardware, gold and airline stocks are also saw notable weakness, while energy stocks bucked the downtrend amid a sharp increase by the price of crude oil.

Crude oil futures ended sharply higher with rally over four percent on Monday amid indications the Organization of the Petroleum Exporting Countries contributing (OPEC) and their allies plan to decrease production assuming a deal with Iran that lifts sanctions. Meanwhile, traders were more concerned about the lack of supply coming out of Libya and the potential for tropical storms in the Atlantic, which could disrupt production in the Gulf of Mexico. Libya saw its worst fighting in years on Saturday. That raised the possibility of oil-supply disruptions from the OPEC member. Benchmark crude oil futures for October delivery rose $3.95 or about 4.2 percent to settle at $97.01 a barrel on the New York Mercantile Exchange. Brent crude for October delivery gained $4.10 or 4.1 percent to settle at $105.09 a barrel on London's Intercontinental Exchange.

Indian rupee ended weaker against dollar on Monday with fresh dollar demand by banks and importers and firm crude oil prices. Traders got worried as Reserve Bank of India (RBI) data showed that the country's foreign exchange reserves fell $6.687 billion to $564.053 billion in the week ended August 19. In the previous week ended August 12, the reserves declined $2.238 billion to $570.74 billion. Also, Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra has said that in the near-term, inflation trajectory continues to be heavily contingent upon the evolving geopolitical developments, international commodity prices and global financial sector developments. Heavy selloff in Indian equity markets also added pressure on domestic currency. On the global front, dollar shot higher on Monday, briefly scaling fresh 20-year highs against a basket of other currencies, as Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down uncomfortably high inflation. Finally, the rupee ended at 79.94 (Provisional), weaker by 10 paisa from its previous close of 79.84 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 6138.85 crore against gross selling of Rs 6252.42 crore, while in the debt segment, the gross purchase was of Rs 667.01 crore against gross selling of Rs 508.03 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.76 crore against gross selling of Rs 8.49 crore.

The US markets ended lower on Monday, adding to a sharp selloff last week as investors continued to grapple with the fears about looming economic pain stemming from the Federal Reserve's aggressive interest rate hikes. Asian markets are trading mostly in green in early deals on Tuesday, recouping some of the losses in the previous session, despite the broadly negative cues from US markets overnight. Indian equity markets ended deeply in red on Monday along with global peers, as US Federal Reserve Chairman Jerome Powell's comments on keeping interest rates high rattled investors who were hoping that the economic slowdown would prompt a less restrictive policy and a pause in rate hikes soon. Today, markets are likely to make positive start tracking mostly positive cues from other Asian markets. Some support may come as commerce and industry minister Piyush Goyal has said that India is looking at getting duty-free access for different products, identified under One District One Product (ODOP) initiative to promote their exports. The Minister said that these products, which include gold jewellery, toys, handicrafts and handlooms, hold huge opportunities. Meanwhile, as part of its efforts to strengthen customer protection, Reserve Bank of India is considering setting up a fraud registry to create a database of fraudulent websites, phones and various modus operandi used for digital fraud. Such a database will help prevent these fraudsters from repeating the fraud as the websites or phone numbers would be blacklisted. Traders may take note of report that the commerce ministry has said stakeholders of special economic zones (SEZs) suggested measures to further improve the draft Development of Enterprises and Services Hub (DESH) Bill 2022, which would replace the existing SEZ law. In the Union Budget this year, the government proposed to replace the existing law governing SEZs with a new legislation to enable states to become partners in Development of Enterprise and Service Hubs. However, there may be some cautiousness in later in the day as  rating agency Icra in its latest report has said India Inc saw a 39 per cent jump in top lines during April-June quarter but their operating margins declined 213 basis points to 17.7 per cent due to input cost inflation. There may be some buzz in banking stocks as the Centre may revamp the target-setting mechanism for public sector banks (PSBs) and is looking to come up with a fresh framework to monitor the performance of state-owned lenders. The new framework could be on the lines of Statement of Intent (SoI) the government used to sign with PSBs to fix their annual targets.

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

Nifty Top volumes

•  Reliance Industries' (RIL) telecom arm -- Reliance Jio Infocomm (Jio) is planning to invest Rs 2 lakh crore in deploying fifth-generation or 5G telephony.
•  Axis Bank is planning to raise its stake in Max Life Insurance to about 20% over the next 6-9 months.
•  Tata Steel has signed a Memorandum of Understanding with the Govt of Punjab for setting up a 0.75 MnTPA long products steel plant with a scrap-based electric arc furnace.
•  Tata Motors is planning to bring in new products, expand existing model lineups as it aims to retain dominant position in the SUV segment.