Indian equity benchmarks traded volatile and ended marginally in the green on Monday, helped by gains in heavyweight financial stocks such as SBI, Larsen & Toubro and Axis Bank. Traders took some support as India reported Covid-19 cases below the 250,000-mark for the second consecutive. The fresh caseload stood at 2.4 lakh. Amid a drop in cases, a few states have hinted at the possibility of easing lockdown from next month onwards. Some support also came in with a private report stating that the RBI surprised the Centre with a record Rs 99,122 crore in surplus transfer for FY21 and this will help the government tide over the revenue losses from lockdowns and extend more support to the pandemic hit industries and to the poor people. Traders also got relief after industry body Assocham has demanded from the government a 'concentrated and right kind' of relief package for MSME sector, which was most affected by covid-19 pandemic. Besides, RBI data showed the country's foreign exchange reserves rose by $563 million to reach $590.028 billion in the week ended May 14. However, gains remain capped as some concern came with rating agency ICRA stating that slackening economic momentum driven by the second wave of Covid-19 infections in India has emerged as a concern with bruised sentiment, high healthcare costs and fuel expenses likely to limit discretionary purchases in the immediate term. Some anxiety also came as overseas investors withdrew Rs 4,444 crore from Indian markets in May so far amid concerns over the second wave of the coronavirus pandemic and its possible impact on the Indian economy. Traders also took a note of report that the GST Council is its upcoming meeting, scheduled to be held on May 28, is likely to take a call on levy of 12 per cent tax on import of oxygen concentrators for personal use. Finally, the BSE Sensex rose 111.42 points or 0.22% to 50,651.90, while the CNX Nifty was up by 22.40 points or 0.15% to 15,197.70.

The US markets ended higher on Monday with the tech-heavy Nasdaq showing a particularly strong advance. Economic optimism contributed to the buying interest on markets, as the country continues to reopen following the coronavirus pandemic. Covid cases in the US have dropped to their lowest level since June as the nation prepares for Memorial Day weekend. The seven-day average of new infections is about 26,000 as of Sunday. Reopening plays saw notable strength on the day along with technology stocks, which benefited from a rebound in the value of bitcoin. Besides, semiconductor stocks moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 2.3 percent. Considerable strength was also visible among software stocks, as reflected by the 2 percent jump by the Dow Jones US Software Index. Computer hardware stocks also turned in a strong performance on the day, with the NYSE Arca Computer Hardware Index climbing by 1.6 percent.

Crude oil futures ended sharply higher on Monday as inconclusive negotiations with Iran on the nuclear deal issue and reports forecasting a possible hurricane in the Gulf of Mexico eased concerns about any excess supply in the market. Further, a weak dollar, and expectations of a surge in energy demand amid easing travel restrictions in the US and Europe supported oil's uptick. Besides, recent upbeat data like strong manufacturing and services sector reports from the US and some major European economies helped as well. Crude oil futures for July surged $2.47 or about 3.9 percent to settle at $66.05 barrel on the New York Mercantile Exchange. July Brent crude jumped $1.97 or nearly 3 percent to settle at $68.32 a barrel on London's Intercontinental Exchange.

Erasing previous sessions' gains, Indian rupee ended considerably lower against dollar on Monday, on account of sustained dollar demand from importers and banks. Investors' sentiments were dented as ICRA stated that slackening economic momentum driven by the second wave of Covid-19 infections in India has emerged as a concern with bruised sentiment, high healthcare costs and fuel expenses likely to limit discretionary purchases in the immediate term. Adding more pessimism, overseas investors withdrew Rs 4,444 crore from Indian markets in May so far amid concerns over the second wave of the coronavirus pandemic and its possible impact on the Indian economy. On the global front; dollar was pinned near three-month lows against a basket of major currencies on Monday, as bets on a robust global economic recovery continued to support currencies seen as riskier. Finally, the rupee ended 72.96, weaker by 13 paise from its previous close of 72.83 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 7720.45 crore against gross selling of Rs 7388.04 crore, while in the debt segment, the gross purchase was of Rs 221.44 crore with gross sales of Rs 513.20 crore. Besides, in the hybrid segment, the gross buying was of Rs 86.37 crore against gross selling of Rs 75.35 crore.

The US markets ended higher on Monday as investors regained an appetite for risk following two straight weeks of losses. Asian markets are trading in green on Tuesday following overnight gains on Wall Street. Indian markets ended Monday's volatile session on a positive note led by gains in banking and financial stocks. Today, the start of session is likely to be optimistic tracking firm global cues coupled with fall in fresh coronavirus cases in the country. India continued to record steady decline in the number of fresh coronavirus cases with the daily toll slipping below the 200,000-mark. India's fresh Covid cases stood at 1.95 lakh. It is the lowest level of cases in the last 41 days. Traders will be taking encouragement with the commerce and industry ministry's statement that foreign direct investments (FDI) into the country grew 19 per cent to $59.64 billion during 2020-21 on account of measures taken by the government on the fronts of policy reforms, investment facilitation and ease of doing business. Some support will come as RBI data showed bank credit grew by 6.02 per cent to Rs 108.69 lakh crore and deposits increased by 9.87 per cent to Rs 152.17 lakh crore in the fortnight ended May 7, 2021. Traders may take note of report that a Reserve Bank of India (RBI) study has advocated a mix of fiscal and monetary policies to mitigate economic downturn, saying demand side channel needs to be complemented with a conducive monetary transmission mechanism from the supply side. However, there may be some cautiousness as domestic ratings agency Icra forecast a 2 per cent GDP growth in the fourth quarter of 2020-21, and a 7.3 per cent contraction for the full fiscal year. From a GVA or gross value added perspective, the agency pegs Q4 growth at 3 per cent and the full year contraction at 6.3 per cent. There will be some buzz in banking stocks as the Reserve Bank said it will consider amalgamation of District Central Co-operative Banks (DCCBs) with State Cooperative Banks (StCBs) subject to various conditions, including that a proposal should be made by the state government concerned. Aviation stocks will be in focus with ICRA's report that the second wave of the coronavirus pandemic is likely to delay recovery in air passenger traffic with an 80-85 per cent growth year-on-year this fiscal against the earlier estimate of 130-135 per cent. There will be some reaction in jewellery industry stocks as the Centre further extended the deadline for mandatory hallmarking of gold jewellery and artefacts by a fortnight till June 15 in view of the COVID-19 pandemic. There will be some earnings announcements too to keep the markets buzzing.

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

Nifty Top volumes

• Dr Reddy's Laboratories is working on the development of new treatment options for COVID-19 patients which it aims to launch over the next few months. 
• M&M has extended the warranty and service period on its entire range of vehicles till July 31 due to lockdown in several states in the wake of the pandemic. 
• L&T has intensified its efforts to retain its workforce post the outbreak of the second COVID-19 wave. 
• Bharti Airtel's network is fully ready for 5G and it also deployed additional spectrum in Karnataka and Tamil Nadu to boost network quality.