Indian equity benchmarks surged for sixth session in a row and clocked another session of record closing high on Monday, as a budget-inspired rally continued, with Auto, Metal, Industrials and Telecom shares leading the broad-based rally. The benchmarks staged a gap up opening and held on to gains, amid a positive trend in global markets. Sentiments got a boost with Expenditure Secretary T V Somanathan's statement that the government is confident of lowering the fiscal deficit to 4.5 per cent of GDP by 2025-26 fiscal, considering a nominal GDP growth of 10 per cent every year. Sentiments remained up-beat with Economic Affairs Secretary Tarun Bajaj's statement that the government is sticking to the target of becoming a $5 trillion economy by 2024-25 and emphasis on infrastructure sector and other initiatives taken in Budget 2021-22 are aimed at achieving the goal. Investor sentiment was also buoyed after Finance Minister Nirmala Sitharaman said the government will work with the Reserve Bank for execution of the bank privatisation plan announced in the budget. She also said that the government has no plan to form any bank investment company to house the government stakes in banks. Some support also came with Union Minister Nitin Gadkari's statement that the government aims to increase the MSME sector's share in the GDP to 40 percent to benefit the rural poor. Currently, around 6.5 crores micro, small and medium enterprises (MSMEs) contribute 30 per cent to the GDP. Adding to the optimism, the Business Confidence Index (BCI) developed by the Delhi-based economic think tank NCAER rose 29.6 percent between second and third quarter of the current financial year on the back of rollout of COVID-19 vaccines in different countries, including India. Finally, the BSE Sensex rose 617.14 points or 1.22% to 51,348.77, while the CNX Nifty was up by 191.55 points or 1.28% to 15,115.80.

The US markets ended the session at new record closing highs on Monday, following the strong upward move seen last week. A slowdown in the spread of the coronavirus in different parts of the world and vaccine rollout efforts have helped generate continued buying interest. Traders also remained optimistic about the outlook for the global economy and the likelihood of additional US fiscal stimulus. Democrats have taken the first steps toward passing President Joe Biden's $1.9 trillion relief package without Republican support but continue to favor a bipartisan approach. Nonetheless, trading activity was somewhat subdued amid a quiet day on the US economic front, with some traders away from their desks following the Super Bowl on Sunday. Considerable strength was visible among airline stocks, with the NYSE Arca Airline Index soaring by 3.7 percent to its best closing level in almost a year. Semiconductor, housing and networking stocks also saw significant strength, moving higher along with most of the other major sectors.

Magnifying their previous sessions' gains, Crude oil futures ended higher on Monday lifted by leading oil producers' decision to cut output, and rising optimism about a big stimulus from the Joe Biden administration. The Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to extend production cuts till March. Saudi Arabia's decision to cut supply in February and March by 1 million barrels per day contributed as well to the bullish sentiment in the oil market. Amid tighter global supplies, optimism about a pick-up in energy demand, and data showing a drop in new coronavirus cases, further supported oil prices. Crude oil futures for March rose $1.12 or 2 percent to settle at $57.97 barrel on the New York Mercantile Exchange. April Brent crude gained $1.22 or 2.1 to settle at $60.56 a barrel on London's Intercontinental Exchange.

Indian rupee ended weaker against the US dollar on Monday, on increased demand for the greenback from importers and banks. Traders were concerned despite report that foreign portfolio investors (FPIs) remained net buyers to the tune of Rs 12,266 crore in the Indian market in the first five trading sessions of February, as positive sentiment post-Union Budget 2021 sparked a rally in investment. As per FPI statistics available with depositories, overseas investors pumped in a net Rs 10,793 crore into equities and Rs 1,473 crore in the debt segment between February 1-5. However, healthy growth in the domestic equity market and dollar weakness against other currencies overseas capped the rupee loss. On the global front, dollar steadied against major currencies on Monday as traders waited for more data on the US economy, after a disappointing jobs report last week ended a rally in the greenback. The euro was little changed against the dollar, after data showed German industry avoided a contraction in December. Finally, the rupee ended at 72.97, 4 paise weaker from its previous close of 72.93 on Friday.

The FIIs as per Monday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 9129.14 crore against gross selling of Rs 7717.06 crore, while in the debt segment, the gross purchase was of Rs 622.60 crore with gross sales of Rs 1173.33 crore. Besides, in the hybrid segment, the gross buying was of Rs 15.27 crore against gross selling of Rs 31.43 crore.

The US markets settled in green on Monday as investors bet on hopes that a fiscal relief package and vaccine roll-outs would lead to a speedy economic recovery. Asian markets are trading higher on Tuesday following overnight gains on Wall Street that saw the major indexes rallying to record closing highs. Indian markets ended at a record high level on Monday led by strong gains in auto and metal stocks amid positive global cues. Today, the markets are likely to make slightly positive start tracking firm trend in global peers. Traders will be taking encouragement with report that Finance Minister Nirmala Sitharaman said the government is taking steps to carefully monitor the fiscal deficit, which is estimated at 9.5 percent of the GDP for the current financial year. Some support will come with a report that US President Joe Biden and Prime Minister Narendra Modi have agreed to work together on the fight against the COVID-19 pandemic, renew partnership on climate change, rebuild the global economy in a way that benefits the people of both countries and stand together against the scourge of global terrorism. Traders may take note of report that FPIs' ownership in NSE-listed companies reached a five-year high of 22.74 percent in December 2020 on the back of a huge net inflow of Rs 1.42 lakh crore by such investors in the third quarter. However, there may be some cautiousness as India recorded 8,947 fresh Covid-19 cases of the coronavirus disease (Covid-19). The total number of active cases in the country has fallen to 145,690, while the caseload tally stands at 10,803,533. Globally, nearly 107 million people have been infected by the virus. The country continues to be second-most-affected globally, and ranks 18th among worst-hit nations by active cases. There will be some buzz in power stocks as rating agency Moody's upgraded the outlook on the power sector to stable from negative, citing the fifth consecutive month of generation growth in January. Pharma stocks will be in focus as Chemical and Fertiliser Minister D V Sadananda Gowda said that the Indian pharmaceutical industry has proved to be a dependable supplier of quality drugs in a time of global need on account of the COVID-19 pandemic, and is expected to reach a size of $130 billion by 2030. There will be some reaction in coal industry stocks with report that coal demand in the current fiscal may be lower than the initial estimate of 1,085 million tonnes (MT) due to the impact of COVID-19. Telecom industry stocks will be in limelight with report that the government expects that the roll-out of 5G services will begin in early-2022 after another round of spectrum auction that is planned to be held after six month.

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

Nifty Top volumes

• Tata Motors' wholly owned subsidiary -- Jaguar Land Rover is planning to launch all electric SUV I-PACE in India on March 9. 
• Infosys has entered into strategic collaboration with Spirit AeroSystems, a leading aero structures manufacturer. 
• HCL Technologies has crossed the $10B mark in revenue for 2020, it is issuing a one-time special bonus to employees around the world. 
• Sun Pharmaceutical Industries is recalling 36,275 cartons of a drug used to treat low testosterone levels in the US market for incorrect labelling.