Indian equity benchmarks extended their gains to the fifth consecutive session and ended with gains of over one and half percent on Monday, led by gains in Banking, IT, TECK and Finance shares, shrugging off weakness across most global markets. The start of the day was positive, aided by Chief Economic Advisor (CEA) V Anantha Nageswaran's statement that prudent budget assumptions for FY23 will ensure that the macro-fundamentals will be able to hold-up in the near-term amid heightened concerns over the impact of the Russian invasion of Ukraine on the Indian economy. Buying also crept in as India's factory production measured in Index of Industrial Production (IIP) expanded by 1.3 per cent on an annual basis in January 2022 on account of better performance by mining and manufacturing sectors, though capital goods segment remained in contraction mode. Some support also came as India's foreign exchange (forex) reserves rose by $394 million to $631.92 billion in the week ended March 4 led by a sharp jump in foreign currency assets. The forex reserves had declined by $1.425 billion in the previous week. Domestic sentiments remained upbeat throughout the day, taking support from Fitch Ratings' report that strengthening economic recovery and stable financial metrics will help state-owned banks have stable earnings during the next financial year, aided by the gradual unwinding of regulatory forbearance through the year. It also said private sector banks are better placed to reap the benefits of recovery and will continue to increase their market share both in credit as well as deposits. Adding optimism among the market participants, India's merchandise exports rose 25.10 per cent to $34.57 billion in February 2022 as compared to $27.63 billion in February 2021, on account of healthy growth in sectors like engineering, petroleum and chemicals. Traders shrugged off report stating that wholesale price-based inflation grew at 13.11 per cent in February as food prices hardened. The high rate of inflation in February, 2022 is primarily due to rise in prices of mineral oils, basic metals, chemicals and chemical products, crude petroleum & natural gas, food articles and non-food articles etc. as compared to the corresponding month of the previous year. Finally, the BSE Sensex rose 935.72 points or 1.68% to 56,486.02 and the CNX Nifty was up by 240.85 points or 1.45% to 16,871.30.

The US markets ended mostly lower on Monday amid a spike in treasury yields, with the yield on the benchmark ten-year note reaching its highest levels in well over two years. Treasury yields soared as traders looked ahead to the Federal Reserve's monetary policy announcement on Wednesday. With the Fed widely expected to raise interest rates by 25 basis points, traders will pay close attention to the accompanying statement for clues about further rate hikes. The central bank is likely to continue raising rates over the comings months in an effort to combat elevated inflation, although the economic impact of the Russia-Ukraine conflict may affect the pace. However, the roughly flat close by the Dow came as strong gains by credit card giants American Express and Visa helped offset steep losses by tech giants Intel and Apple. Meanwhile, traders kept an eye on the conflict between Russia and Ukraine, as the two countries resumed talks on Monday. A Ukrainian official said the country's objectives were to secure a ceasefire and an immediate withdrawal of Russian troops, along with other security guarantees. On the sectoral front, energy stocks moved sharply lower along with the price of crude oil. Reflecting the weakness in the sector, the Philadelphia Oil Service Index dove by 5.2 percent, the NYSE Arca Natural Gas Index tumbled by 3.6 percent and the NYSE Arca Oil Index slumped by 2.3 percent. Significant weakness was also visible among gold stocks, which came under pressure amid a notable decrease by the price of the precious metal. Semiconductor and computer hardware stocks also saw substantial weakness on the day, contributing to the steep drop by the tech-heavy Nasdaq.

Crude oil futures ended deeply in red on Monday amid talks between Russia and Ukraine as well as new Covid-19 lockdowns in China - which could dent demand.  Private reports stated that China is seeing its worst Covid outbreak in more than two years have raised concerns over demand. The city of Shenzhen has gone into lockdown, whilst other cities are also seeing tougher restrictions. Meanwhile, investor focus also shifted to major central bank meetings this week amid inflation risks from commodity supply disruptions. Benchmark crude oil futures for April delivery fell $6.32 or 5.8 percent to settle at $103.01 a barrel on the New York Mercantile Exchange. Brent crude for May delivery dropped $5.63 or nearly 5.1 percent to settle at $106.90 a barrel on London's Intercontinental Exchange.

Indian rupee depreciated against dollar on Monday due to demand for American currency from banks and importers. Uncertainty over the war in Ukraine and persistently high inflation kept investors worried. Sentiments were also fragile as Reserve Bank of India's deputy governor Michael Patra said India's growth story remains as weak as it was during the 2013 taper tantrum and recent geopolitical tensions in Ukraine and Russia are further likely to hurt a recovery. Investors' paid no heed to India's merchandise exports rose 25.10 per cent to $34.57 billion in February 2022 as compared to $27.63 billion in February 2021, on account of healthy growth in sectors like engineering, petroleum and chemicals. On the global front, dollar slipped on Monday, but was still near a five-year high versus Japan's yen as investors braced for a busy week of major central bank meetings. Finally, the rupee ended at 76.54, weaker by 10 paise from its previous close of 76.44 on Friday.

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 6702.31 crore against gross selling of Rs 8021.60 crore, while in the debt segment, the gross purchase was of Rs 37.32 crore against gross sales of Rs 436.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 18.95 crore against gross selling of Rs 22.99 crore.

The US markets ended mostly lower on Monday as investors lightened positions in tech and high growth stocks ahead of the expected US Fed rate hike on Wednesday. Asian markets are trading mixed on Tuesday following the release of Chinese economic data that was far above expectations. Indian markets surged to three-month closing highs and ended higher on Monday led by financial and IT shares, building on gains in the past four consecutive sessions. Today, the markets are likely to get a cautious start amid mixed Asian cues. Weak inflation data likely to dampen sentiments in the markets. Data released by the Ministry of Statistics and Programme Implementation showed that India's retail inflation in February rate rose to an eight-month high of 6.07 percent from 6.01 percent in the previous month, remaining above the upper limit of the central bank's comfort level of 6 per cent for the second consecutive month. Inflation based on the Consumer Price Index (CPI) was 5.03 percent in February 2021. Traders will be concerned as SBI forecast more pain for the rupee if the ongoing Ukraine war lingers, plumbing to a new low of 77.5 to a dollar by June and marginally improving to 77 by end-December. It also said the current account deficit (CAD) will be at 3.5 per cent if crude oil trades at $130 a barrel, pulling down growth to 7.1 per cent. Some pessimism may come with an another report by the Ministry of Statistics and Programme Implementation showing that India's urban unemployment rate jumped to 12.6 percent in April-June 2021 from 9.3 percent in the previous quarter. There will be some buzz in banking stocks with report that bank frauds over the last five years have come down drastically to Rs 648 crore in first nine months of 2021-22, on the back of structural and procedural reforms to check such incidents. Besides, foreign institutional investors (FIIs) continue selling in India as they have net sold shares worth Rs 176.52 crore on March 14, the lowest offloading in a single day in the last one month. Housing finance companies stocks will be in focus as rating agency ICRA said the finance companies and housing finance companies would require Rs 1.8-2.2 trillion of incremental fresh funding to meet its growth requirement in FY23 while maintaining the liquidity buffers. There will be some reaction in real estate industry stocks as the government widened the meaning of Real estate business under the foreign direct investment (FDI) policy which now includes dealing in land and immovable property to earn profit. Edible oil industry stocks will be in limelight as industry body SEA said India's edible oil imports rose 23 per cent to 9,83,608 tonnes in February mainly due to a sharp rise in shipments of refined palm oil.

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

Nifty Top volumes

• Tech Mahindra has approved the proposal to acquire 100% equity shares in Thirdware Solutions.
• RBI has lifted all restrictions on HDFC Bank, permitting it to launch new digital initiatives. 
• Coal India's subsidiary company -- Mahanadi Coalfields has crossed 157 MT in coal production in the financial year of 2021-22, to become the leading coal producing company in the country. 
• Larsen & Toubro's construction arm has secured various contracts for Water and Effluent Treatment Business.