Indian equity benchmarks bounced back on Monday after a three-day fall and ended with gains of over half percent, largely helped by buying in FMCG, Auto and TECK counters despite weakness in global market. Key gauges made cautious start, as traders were concerned with data from Reserve Bank showed India Inc's investment in their overseas ventures dropped by 59 per cent on an annual basis to $1.03 billion in August this year. Some pessimism also came in as the country's foreign exchange reserves declined by $2.234 billion to stand at $550.871 billion for the week ended September 9.  However, key indices quickly recovered the lost ground and traded higher, taking support from the finance ministry's statement that gross direct tax collections grew 30 per cent to Rs 8.36 lakh crore till September 17 of current fiscal year on higher advance tax mop-up buoyed by the economic revival post pandemic. Some support also came as foreign investors pumped Rs 12,000 crore into the Indian equity market so far this month on hopes that global central banks, particularly the US Fed, may go slow on rate hikes as inflation starts to cool off. Markets continued to trade in fine fettle in late afternoon deals, as traders took some solace with the Monthly Economic Report of the Department of Economic Affairs, Ministry of Finance stating that India retained its status as an attractive destination among a set of developed and developing economies, as the 5th largest recipient of FDI in the April-June quarter. According to the report released, during Q1 of 2022, India was the 5th largest recipient of FDI among the defined set of developed and developing economies, as a buoyant growth outlook coupled with steady improvement in ease of doing business and supportive government policies retained India as an attractive business destination. Some optimism also came with Prime Minister Narendra Modi's statement that Indian economy is expected to grow by 7.5 per cent this year and it will be the highest among the world's largest economies. He said India is making progress to become a manufacturing hub while highlighting various aspects of the country's economy. Finally, the BSE Sensex rose 300.44 points or 0.51% to 59,141.23 and the CNX Nifty was up by 91.40 points or 0.52% to 17,622.25.

The US markets settled in green in a volatile trading session on Monday as traders picked up stocks at reduced levels following recent weakness. The subsequently rebound by the major averages came after they pulled back near the two-month intraday lows set last Friday. Traders largely shrugged off a report from the National Association of Home Builders showing US homebuilder confidence declined for the ninth consecutive month in September. The report showed the NAHB/Wells Fargo Housing Market Index slid to 46 in September from 49 in August. Street had expected the index to edge down to 48. With the bigger than expected decrease, the housing market index dropped to its lowest level since hitting 45 in May 2014. However, trading activity remained somewhat subdued ahead of the Federal Reserve's two-day policy meeting slated to kick off Tuesday. The Federal Reserve is widely expected to announce another 75-basis point hike in interest rates this Wednesday. A number of other major central banks around the world are also scheduled to announce their latest monetary policy decisions this week, including the Bank of England and the Bank of Japan. On the sectoral front, Airline stocks showed a substantial rebound after falling sharply in the previous session, with the NYSE Arca Airline Index soaring by 3.0 percent after ending last Friday's trading at its lowest closing level in well over a month. Steel stocks also saw significant strength following recent weakness, driving the NYSE Arca Steel Index up by 2.9 percent. The index ended the previous session at a nearly two-month closing low.

Crude oil futures ended higher on Monday amid concerns about supplies. According to private reports, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known as OPEC+, fell short of its oil production target by 3.583 million barrels per day in August. The group had missed its target in June as well, falling short by nearly 2.9 million barrels per day. However, a fairly steady dollar amid possible sharp hikes in interest rates limited oil's upside. The Federal Reserve is widely expected to announce another 75-basis point hike in interest rates this Wednesday. Meanwhile, the Bank of England, the Bank of Japan, The People's Bank of China, and the Swiss National Bank are also scheduled to announce their rate decisions this week. Benchmark crude oil futures for October delivery surged $0.62 or 0.7 percent at $85.73 a barrel on the New York Mercantile Exchange. Brent crude for November delivery rose $0.66 or about 0.73 percent to settle at $92.01 a barrel on London's Intercontinental Exchange.     

Indian rupee ended marginally lower against the US dollar on Monday, on increased demand for the greenback from importers and banks. Traders were worried as data from Reserve Bank showed India Inc's investment in their overseas ventures dropped by 59 per cent on an annual basis to $1.03 billion in August this year. However, downfall remain capped as Monthly Economic Report of the Department of Economic Affairs, Ministry of Finance said India retained its status as an attractive destination among a set of developed and developing economies, as the 5th largest recipient of FDI in the April-June quarter. On the global front, dollar held firm near two-decade highs against other major currencies on Monday, biding its time ahead of a slew of central bank meetings that include one by the U.S. Federal Reserve that is likely to deliver another hefty rate hike. Finally, the rupee ended at 79.81 (Provisional), weaker by 3 paisa from its previous close of 79.78 on Friday.

The FIIs as per Monday's data were net sellers in equity and net buyers in debt segment. In equity segment, the gross buying was of Rs 20816.48 crore against gross selling of Rs 24293.21 crore, while in the debt segment, the gross purchase was of Rs 6194.66 crore against gross selling of Rs 299.81 crore. Besides, in the hybrid segment, the gross buying was of Rs 618.44 crore against gross selling of Rs 52.04 crore.

The US markets ended higher on Monday thanks to a technical rebound and bargain-hunting after last week's nightmarish run. Asian markets are trading in green on Tuesday following overnight gains on Wall Street. Indian markets closed higher on Monday after losing almost three percent of their value in the past three sessions, aided by gains in financial, FMCG and IT stocks though losses in metal shares played spoilsport. Today, markets are likely to get optimistic start tailing strength in global peers. Investors awaited the outcome of a two-day FOMC meeting due to begin later in the day, wherein the Fed is widely expected to decide on a 75 basis-point hike in the key lending rates. Foreign fund inflows likely to support the domestic sentiments. Foreign institutional investors (FIIs) have net bought shares worth Rs 312.31 crore on September 19, as per provisional data available on the NSE. Some support will come with a private survey report indicating that Indian consumers are concerned about rising costs but 71 per cent of them believe the economy will recover within a year. Traders may take note of report that capital markets regulator Sebi has put in place a new framework which will prevent misuse of clients' securities and funds by their stock brokers. Meanwhile, food secretary Sudhanshu Pandey said the Centre will soon invite private players along with Food Corporation of India and other state agencies to procure foodgrains for buffer stock. However, there may be some cautiousness as India Ratings expects the current account deficit to hit a 36-quarter high of 3.4 per cent of GDP or $28.4 billion in the June quarter, against a 0.9 per cent surplus a year ago. Some pessimism may come as surplus liquidity in the banking system as measured by absorption of excess funds by the Reserve Bank of India (RBI) fell sharply at the end of the last week due to outflows on account of advance tax payments. According to the RBI data, the net liquidity absorbed by the central bank on September 16 was at Rs 3,243.57 crore, much lower than the average of Rs 56,809.92 crore in the preceding four days of the week. There will be some buzz in sugar industry stocks as Food Secretary Sudhanshu Pandey said the government will soon announce export quota of sugar for next marketing year starting October. Banking stocks will be in focus as India Ratings has revised credit growth estimate for FY23 to 13 per cent from 10 per cent due to factors like uptick in working capital demand, while maintaining a stable outlook on banks. There will be some reaction in oil industry stocks as the oil ministry sought a review of the two-and-a-half-month old windfall profit tax on domestically produced crude oil saying it goes against the principle of fiscal stability provided in contracts for finding and producing oil. Besides, government data showed India's crude oil imports fell more than 13% in August month-on-month, as monsoon rains restricted activity and slowed consumption in the world's third-biggest oil consumer.

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

Nifty Top volumes

• ONGC has sought the government to scrap windfall profit tax levied on domestically produced crude oil and instead use the dividend route to tap into bumper earnings resulting from surge in global energy prices. 
• SBI and SBI Global Factors have entered into an agreement with SIDBI, Union Bank of India and Bank of Maharashtra, to purchase Equity Shares of SBIGFL held with these three banks. 
• HDFC Life Insurance Company has received approval from The National Company Law Tribunal for merger of Exide Life Insurance with itself. 
• M&M's wholly owned subsidiary -- MHL, MSPL and Ontario (2OL) have entered into a Share Purchase agreement and Shareholders' agreement to sell 30% of paid up equity share capital of MSPL by MHL to 2OL.