Indian equity benchmarks, after a reasonable weakness of the last few sessions, witnessed a sharp comeback on Monday and closed the day with hefty gains of over one and half percent, on the back of strong gains in heavyweights such as Indusind Bank, SBI, ICICI Bank and HDFC Bank. Market started the day on positive note and traded in fine fettle, as sentiments got a boost with the government data showing that India's exports in April jumped nearly three-fold to $30.63 billion from $10.36 billion in the same month last year. Imports too rose to $45.72 billion last month as against $17.12 billion in April 2020. Traders also took note of report that the average of daily cases has fallen for seven days in a row with India reporting 281,860 new cases in the last 24 hours. This is the first time since April 21 that India has recorded new cases below the 300,000 mark. The indices extended gains and continued their upward rally in late afternoon session, taking support from the India Meteorological Department (IMD) stating that the southwest monsoon is likely to arrive over Kerala on May 31, a day earlier than its normal onset date. The normal onset date of the monsoon over Kerala is June 1. Traders also found some solace with RBI data showed that country's foreign exchange reserves increased by $1.444 billion to $589.465 billion in the week ended May 7, 2021. In the previous week ended April 30, 2021, the reserves had risen by $3.913 billion to $588.02 billion. Market participants paid no heed towards report that the wholesale price-based inflation shot up to an all-time high of 10.49 per cent in April, on rising prices of crude oil and manufactured items. Also, a low base of April last year contributed to the spike in inflation in April 2021. The street also overlooked that Care ratings' latest survey stated that amid a raging second wave of COVID-19 and subsequent restrictions on business activities imposed by several states, economic recovery is beginning to lose steam and the country's GDP growth is likely to be below nine per cent for the current fiscal. Finally, the BSE Sensex gained 848.18 points or 1.74% to 49,580.73, while the CNX Nifty was up by 245.35 points or 1.67% to 14,923.15.

The US markets ended lower on Monday on lingering concerns about inflation and the outlook for monetary policy weighed on Wall Street ahead of the release of the minutes of the Federal Reserve's latest monetary policy meeting on Wednesday. Traders are likely to closely analyze the Fed minutes for indications officials are growing concerned about the recent acceleration in inflation and considering tapering asset purchases. The Fed has repeatedly signaled that it believes the increase in inflation largely reflects transitory factors, although the spike in consumer prices reported by the Labor Department last week still helped trigger a sell-off on Wall Street. On the economic data front, the Federal Reserve Bank of New York released a report showing its index of regional manufacturing activity pulled back modestly in May after jumping to a more than three-year high in the previous month. The New York Fed said its general business conditions index dipped to 24.3 in May from 26.3 in April, although a positive reading still indicates growth in regional manufacturing activity. Street had expected the index to slip to 23.9 after reaching its highest level since October of 2017 in the previous month. Meanwhile, the National Association of Home Builders released a separate report showing homebuilder confidence in the US held stable in the month of May. The report showed the NAHB/Wells Fargo Housing Market Index came in at 83 in May, unchanged from April. The unchanged reading matched street estimates.

Crude oil futures ended higher on Monday on hopes energy demand will pick up soon as the US and European economies are showing signs of a quick recovery from the pandemic. A private report said that the UK will be relaxing some social restrictions supported oil prices. France and Spain have reportedly relaxed COVID-related restrictions. Travel restrictions have been relaxed in Netherlands and Portugal as well. Further, with climbing vaccinations and dwindling virus cases in the US, investors expect increased demand for gasoline in the world's largest economy in the coming weeks. Meanwhile, traders were also tracking reports from the Middle East, where Israel and Gaza's ruling Hamas militant group faced mounting international calls for a ceasefire in hostilities that entered their second week with no end in sight. Crude oil futures for June rose $0.90 or about 1.4 percent to settle at $66.27 barrel on the New York Mercantile Exchange. July Brent crude gained $0.79 or 1.15 percent to settle at $69.50 a barrel on London's Intercontinental Exchange.

Indian rupee ended higher against dollar on Monday, owing to dollar sale by exporters and banks and positive domestic equities. This was the second consecutive session when the rupee was traded higher against dollar. Sentiments were upbeat with the government data showing that India's exports in April jumped nearly three-fold to $30.63 billion from $10.36 billion in the same month last year. Imports too rose to $45.72 billion last month as against $17.12 billion in April 2020. Traders also remain energized after RBI data showed that country's foreign exchange reserves increased by $1.444 billion to $589.465 billion in the week ended May 7, 2021. Traders ignored report that foreign portfolio investors (FPIs) pulled out Rs 6,452 crore so far in May from Indian markets amid tumbling investor sentiment due to the second wave of the COVID-19 pandemic. On the global front; dollar edged higher on Monday as new COVID-19 restrictions in Asia and mixed economic data in China encouraged investors to stick with safer currencies. Finally, the rupee ended 73.22, stronger by 7 paise from its previous close of 73.29 on Friday.

The FIIs as per Monday's data were net seller in equity segment, while net buyer in debt segment. In equity segment, the gross buying was of Rs 5812.52 crore against gross selling of Rs 8294.68 crore, while in the debt segment, the gross purchase was of Rs 675.24 crore with gross sales of Rs 553.36 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.24 crore against gross selling of Rs 33.70 crore.

The US markets ended lower on Monday weighed down by tech shares as signs of growing inflation worried investors about the potential for tighter monetary policy. Asian markets are trading in green on Tuesday as investors weighed the pace of growth as nations vaccinate and economies reopen against a pick-up in virus cases in the region. Indian markets surged over 1.5 percent on Monday boosted by banking and financial stocks, as they rebounded from a sharp drop in the previous session. Today, the markets are likely to extend their previous session's gaining momentum with gap-up opening tracking rally in Asian peers. Traders will be taking some encouragement as India recorded daily cases below 3 lakh for the second straight day. The fresh case count in the last 24 hours stood at 2.63 lakh versus 2.81 lakh. Some support will come with the RBI data showing that India Inc's foreign investment in the first month of this current fiscal jumped by more than two-times year-on-year to $2.51 billion. However, there may be some cautiousness as Moody's Investors Service said if the second wave of the pandemic does not decline to more manageable levels and results in a prolonged and wider lockdown, it will have a more severe effect on companies' earnings recovery. Traders may take note of report that the Reserve Bank of India (RBI) said in its monthly bulletin that the biggest blow emerging from the second wave of the coronavirus pandemic is demand shock while the supply side remains better positioned. Loss of mobility, discretionary spending and employment are among the key concerns emerging. However, the RBI bulletin acknowledged that the loss of growth momentum is not as severe as at this time a year ago when the country had witnessed a Covid-induced lockdown. Meanwhile, Markets regulator SEBI has proposed an elaborate framework for setting up a gold exchange wherein the yellow metal will be traded in the form of electronic gold receipts and will help in having a transparent domestic spot price discovery mechanism. Jewellery industry stocks will be in focus as Gem and Jewellery Export Promotion Council (GJEPC) said the demand for gem and jewellery is back in major export markets, as the overall shipments of gems and jewellery surged to Rs 25,226.11 crore year-on-year in April 2021. There will be some reaction in real estate industry stocks with a private report stating that housing sales increased by 21 per cent while new supply declined 40 per cent year-on-year during January-March 2021 across seven major cities. Power industry stocks will be in limelight as government data showed India's electricity use fell 6.2 per cent during the first half of May compared with the second half of April, as coronavirus lockdowns imposed by states across the country stifled power demand.

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

Nifty Top volumes

• Hero MotoCorp is all set to launch an electric model next year and mark its entry into the segment. 
• SBI is planning to sell three bad accounts to asset reconstruction companies or other financial institutions next month to recover dues of over Rs 235 crore. 
• Reliance Industries has once again launched an AI-enabled WhatsApp chatbot to address investor queries about the first call for payment of money relating to its Rs 53,125 crore rights issue. 
• Dr. Reddy's Laboratories and Apollo Hospitals have collaborated to initiate a COVID-19 vaccination programme with Sputnik V.