Indian equity markets closed with losses of over half a percent on Monday, as investors remained on sidelines ahead to the India's Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out later in the day for more directional cues. Markets made a slightly positive start but quickly shed the gains and slipped gradually lower as trade elsewhere in Asia remained muted with most markets closed on account of the Lunar New Year. Sentiments remained down-beat as India Ratings and Research (Ind-Ra) in its latest report stated that sustained disruptions in the Red Sea route is likely to raise the freight and forwarding (F&F) cost by 25-30 per cent for corporates largely dealing in international trade. Traders took a note of Piyush Goyal's statement that India may not get the same amount of foreign direct investment (FDI) in the current financial year as compared to FY23, but I don't see it as a material factor. Muted Q3 earnings by ONGC and Tata Power Company also dented investor sentiment. Traders overlooked Central Board of Direct Taxes' (CBDT) statement that net direct tax collection so far in current fiscal grew 20 per cent year-on-year to Rs 15.60 lakh crore, which is 80 per cent of revised budget estimates for full fiscal year. Traders also paid no heed towards the provisional data from the NSE showing that foreign institutional investors (FIIs) net bought shares worth Rs 141.95 crore on February 9. Finally, the BSE Sensex fell 523.00 points or 0.73% to 71,072.49 and the CNX Nifty was down by 166.45 points or 0.76% to 21,616.05.

The US markets ended mostly lower on Monday. The choppy trading on markets came as traders took a breather following recent strength, which has lifted the S&P 500 above 5,000 for the first time ever. A lack of major U.S. economic data also kept some traders on the sidelines ahead of the release of several key reports in the coming days. On Tuesday, the Labor Department is due to release its report on consumer price inflation in the month of January, which could have a significant impact on the outlook for interest rates. Reports on retail sales, industrial production, producer price inflation and consumer sentiment are also likely to attract attention later in the week. On the sectoral front, despite the lackluster performance by the broader markets, tobacco stocks moved sharply higher on the day, driving the NYSE Arca Tobacco Index up by 3.5 percent. Substantial strength was also visible among networking stocks, as reflected by the 2.5 percent surge by the NYSE Arca Networking Index. Telecom stocks also showed a significant move to the upside, resulting in a 1.8 percent jump by the NYSE Arca North American Telecom Index. Housing, natural gas and banking stocks also saw notable strength, while software stocks came under pressure over the course of the session. Among individual stocks, shares of Teva Pharmaceutical (TEVA) soared by 7.5 percent after Piper Sandler upgraded its rating on the pharmaceutical company to Overweight from Neutral. Space company Rocket Lab (RKLB) also spiked by 8.8 percent after Citi resumed coverage of the company's stock with a Buy rating.

Crude oil futures ended flat on Monday amid demand concerns outweighed potential supply disruptions. The dollar's recovery from lower levels weighed as well on crude oil prices. Concerns about the outlook for oil demand from China amid a surge in electric vehicle sales there hurt oil prices. Meanwhile, there were concerns about possible disruptions in trade and crude supplies due to the U.S. and UK ramping up airstrikes against Houthi rebels in Yemen. Benchmark crude oil futures for March delivery added $0.08 or about 0.10% to settle at $76.92 a barrel on the New York Mercantile Exchange. However, Brent crude for April delivery fell $0.19 or about 0.23% to $82 per barrel on London's Intercontinental Exchange.  

Indian rupee ended higher on Monday on softness in the American currency and easing crude oil prices. Investors got support as Central Board of Direct Taxes (CBDT) has said that net direct tax collection so far in current fiscal grew 20 per cent year-on-year to Rs 15.60 lakh crore, which is 80 per cent of revised budget estimates for full fiscal year. Meanwhile, Commerce and Industry Minister Piyush Goyal has said that India continues to be a preferred FDI (foreign direct investment) destination despite soaring global interest rates. On the global front, Russian rouble steadied on Monday, held up by relatively high oil prices, as exporters start converting foreign currency revenues in preparation for month-end tax payments. Finally, the rupee ended at 83.00 (Provisional), stronger by 7 paise from its previous close of 83.07 on Friday.

The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 14047.13 crore against gross selling of Rs 13716.81 crore, while in the debt segment, the gross purchase was of Rs 1840.40 crore with gross sales of Rs 2540.15 crore. Besides, in the hybrid segment, the gross buying was of Rs 26.31 crore against gross selling of Rs 10.21 crore.

The US markets ended mostly in red on Monday ahead of two US inflation reports this week that could influence Federal Reserve policy. Asian markets are trading mostly in green on Tuesday as more markets return to trade from the Lunar New Year holiday amid Japan's corporate goods price index rose 0.2 percent in January. Indian markets after making positive start fell to hold the gains and ended lower on Monday amid selling across the sectors barring IT and pharma names. Today, markets are likely to get flat to positive start amid mixed cues from global markets. Positive macro-economic data likely to aid domestic sentiments. data released by the Ministry of Statistics and Programme Implementation showed that India's headline retail inflation rate decelerated to a three-month low of 5.10 percent in January due to easing food prices. Also, the Index of Industrial Production (IIP) growth for December 2023, meanwhile, was 3.8 per cent, compared to 2.4 per cent recorded in November. Foreign fund inflows likely to support domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 126.60 crore on February 12, provisional data from the NSE showed. Besides, the Periodic Labour Force Survey (PLFS) data, released by the National Statistical Office showed that the jobless rate in urban India marginally declined further in Q3 (October-December) of FY24 to 6.5 per cent from 6.6 per cent in the preceding quarter, thus reflecting continued improvement in the labour markets. Traders may take note of report that the Reserve Bank of India (RBI) conducted two four-day variable rate repo (VRR) auctions to infuse liquidity into the banking system. The liquidity deficit in the system widened to Rs 1.93 trillion on Sunday. Meanwhile, Federation of Indian Chambers of Commerce & Industry's (Ficci) latest quarterly survey on manufacturing for Q4 FY24 projected future investment outlook as steady but industry respondents have flagged the availability of raw materials and their escalating prices, uncertainty in global demand, shortage of skilled labour, market volatility, increased power costs, unutilised capacities, and high bank interest rates, as some of the major constraints going forward. PSUs stocks will be in focus as MSCI added PSU stocks like - NMDC, BHEL, PNB and Union Bank to the MSCI India standard index under the February review. GMR Airports too added. There will be some reaction in edible oil industry stocks as the trade body Solvent Extractors' Association of India (SEA) said the imports of edible oils - palm, soyabean, and sunflower in the first quarter of the 2023-24 oil year (October-September) declined by 23% to 3.64 million tonnes (mt) compared to the same period last year.

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

Nifty Top volumes

• ONGC has reported 7.86% fall in consolidated net profit at Rs 10748.46 crore for the third quarter ended December 31, 2023 as compared to Rs 11665.24 crore for the same quarter in the previous year.
• Tata Motors has entered into a partnership with the Leadership Group for Industry Transition.
• Hero MotoCorp has reported 51.28% rise in consolidated net profit at Rs 1091.12 crore for the third quarter ended December 31, 2023 as compared to Rs 721.24 crore for the same quarter in the previous year.
• Bharti Airtel has launched four new, next-gen Company owned stores in the city of Calicut.