Indian equity benchmarks made a smart intra-day recovery after opening with losses but failed to hold gains and closed deep in the red on Monday, following weak global sentiments. This was the second consecutive session in which the markets ended in the red. Key indices opened with a gap down as traders got anxious with report that the country's foreign exchange reserves declined by $1.34 billion to $641.113 billion in the week ended September 10, 2021, according to RBI data. During the reporting week ended September 10, the fall in the reserves was on account of a decline in Foreign Currency Assets (FCAs), a major component of the overall reserves. Some cautiousness also prevailed in the markets with President Ram Nath Kovind's statement the Covid pandemic hit the country's economy hard and the government has taken various fiscal measures to alleviate distress and help the poor.  However, markets recouped initial losses to trade marginally higher in late morning deals, taking support from Commerce and Industry Minister Piyush Goyal's statement that Simplification, facilitation and ease of doing business has helped India create more startups. For promoting startups, he said the government is creating future global leaders and wants to become the innovation hub of the world. Some support also came with Sebi data indicating that investment through participatory notes (P-notes) in the domestic capital market was at Rs 97,744 crore till August-end, and going forward the inflow is expected to remain positive for the rest of the year. But, buying proved short-lived as markets once again entered into red terrain and ended in a bear grip, as investors were spooked by a possible spillover of China's Evergrande's debt woes, fall in commodity prices and ahead of US Federal Reserve policy meet outcome. Traders also took a note of report that hiring activity in India witnessed a marginal growth of 1 per cent in August sequentially due to decline in job postings in sectors including engineering, logistic, agro-based industries among others, which has shown a slight improvement in the previous month. Finally, the BSE Sensex fell 524.96 points or 0.89% to 58,490.93 and the CNX Nifty was down by 188.25 points or 1.07% to 17,396.90.

The US markets ended lower on Monday as worries about potential collapse of China's real estate firm Evergrande dented sentiment. China's property giant Evergrande, the world's most indebted property developer with more than 300 billion dollars of liabilities, has to pay interests on its bonds with a payment deadline due on Thursday. The company has warned more than once that it could default. Further, traders also looked ahead to the Federal Reserve's highly anticipated monetary policy announcement on Wednesday. The central bank is widely expected to leave monetary policy unchanged but could address the outlook for its asset purchase program. The minutes of the Fed's last meeting signaled the central bank was prepared to begin scaling back asset purchases by the end of the year. With some recent disappointing economic data suggesting the Fed could push back its plans, traders are likely to pay close attention to the wording of the post-meeting statement. On the sectoral front, Shares from metal, energy, financial, semiconductor and housing sectors were under pressure. Technology stocks dropped as well.

Crude oil futures settled sharply lower on Monday as worries about a likely slowdown in global economic growth raised concerns about the outlook for energy demand. A stronger dollar too weighed on oil prices. The dollar climbed to a one-month high as rising risk aversion amid pending catastrophe at developer China Evergrande Group weighed on equity markets. Benchmark Crude oil futures October delivery fell $1.68 or 2.3 percent to settle at $70.29 barrel on the New York Mercantile Exchange. Brent crude for November delivery dropped $1.42 or 1.9 percent to settle at $73.92 a barrel on London's Intercontinental Exchange. 

Indian rupee ended considerably weaker against the US dollar on Monday. Muted trend in domestic equities also dragged the local unit down. Sentiments were fragile after US Treasury Secretary Janet Yellen renewed her call for raising the country's debt ceiling to avoid a possible debt default by the world's largest economy. Yellen did not mention the timing of the default, but had earlier said that a default could come during October when the Treasury exhausts its cash reserves and extraordinary borrowing capacity under the $28.4 trillion debt limit. Additional pressure also came after Reserve Bank of India's (RBI) data showed that country's foreign exchange reserves declined by $1.34 billion to $641.113 billion in the week ended September 10, 2021. On the global front, offshore Chinese yuan skidded to three-week lows on Monday, dragging lower other risk and commodity currencies, while the haven dollar rose as worries about Chinese property developer Evergrande's solvency spooked financial markets. Finally, the rupee ended 73.74, weaker by 26 paise from its previous close of 73.48 on Friday.

The FIIs as per Monday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 26752.30 crore against gross selling of Rs 24956.52 crore, while in the debt segment, the gross purchase was of Rs 478.73 crore with gross sales of Rs 410.48 crore. Besides, in the hybrid segment, the gross buying was of Rs 108.45 crore against gross selling of Rs 139.90 crore.

The US markets ended sharply lower on Monday as investors continued to flock to the sidelines in September amid several emerging risks for the market. Asian markets are trading mostly lower in early deals on Tuesday as investors continued to monitor the situation surrounding embattled developer China Evergrande Group. Indian equity benchmarks ended in deep red on Monday, pulled down by the metal stocks. Today, the start is likely to be positive despite weak cues from global markets. Traders will be getting support with Private report stating that Investors have been pouring money into India's stock market, and it could grow to more than $5 trillion to become the fifth largest in the world within three years. It added Indian start-ups have raised $10 billion through IPOs so far this year - more money than was raised in the last three years.  More support can come as India has climbed two spots to 46 in the Global Innovation Index (GII) 2021 prepared by the World Intellectual Property Organization (WIPO). The country's rank has been consistently rising in the last few years. From 81 in 2015, it has moved to 46 in 2021. Traders may take note of report that apex exporters' body Federation of Indian Export Organisations (FIEO) said it will focus on new products and markets for diversification with a view to boost the country's outbound shipments. Besides, the finance ministry will kick-start the exercise to prepare the Union Budget for financial year 2022-23 (FY23) from October 12.  However, traders may be cautious on report that Icra Ratings said with the benefits of unlocking measures tapering out, high-frequency indicators have become uneven since August. The performance of the high-frequency indicators in August 2021 was decidedly uneven, especially when compared to the pre-COVID levels. It appears that the temporary boost, provided by the easing of state-wise restrictions after the second wave of COVID-19 ebbed, petered out. Meanwhile, RBI Deputy Governor M Rajeshwar Rao has said there is a need to mainstream green finance and devise ways for incorporating environment impact into commercial lending decisions. Addressing climate risk in the financial sector should be the joint responsibility of stakeholders as it would affect the resilience of the financial system in the long run, he said.  There will be some buzz in It stocks as exports of software services, including services delivered by foreign affiliates of Indian companies, recorded 2.1 per cent growth during 2020-21 and stood at USD 148.3 billion, as per a Reserve Bank survey released.  There may be some reaction in sugar stocks as the Centre has so far cleared Rs 1,800 crore in subsidy to sugar mills for undertaking a mandated export of 6 million tonnes of the sweetener in the 2020-21 season-ending this month. Paras Defence and Space Technologies IPO will open for subscription today where investors can bid for shares in the price band of Rs 165-175 per share. The issue will close on September 23.

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

Nifty Top volumes

• Bharti Airtel's subsidiary -- Airtel Payments Bank has launched Rewards123Plus digital savings account variant.
• Tata Consultancy Services (TCS) has agreed to invest Rs 690 crore to set up an Innovation Park in Kochi.
• HDFC Bank and Paytm have unveiled plans for launching a comprehensive range of credit cards powered by VISA.
• Kotak Mahindra Bank has agreed to subscribe to 1,67,25,100 Equity Shares in KFin Technologies.