In an extremely volatile session, Indian benchmark indices recouped most of losses to close flat on Monday as investors remained on sidelines and deferred from making any large moves ahead of RBI Monetary Policy Committee meeting outcome. The outcome of the meeting will come on December 07. There are expectations that the Reserve Bank of India MPC is likely to announce a 35 basis points (bps) rate hike. After making cautious start, key gauges fell sharply even as report stated that after pulling out money from Indian equities market in the past two months, Foreign Portfolio Investors (FPIs) made a strong come back in November with a net investment of Rs 36,329 crore on weakening of the US dollar index and positivity about overall macroeconomic trends. However, key gauges erased losses in early afternoon deals, as traders found some support with Economic Advisory Council member Sanjeev Sanyal's statement that India is capable of sustaining an economic growth of 9 per cent for many years, even as he asserted that a high sustained GDP growth rate is key for the world to achieve the 2030 Sustainable Development Goals (SDGs). But, markets failed to hold recovery and once again fell sharply in late afternoon session despite the Reserve Bank of India's (RBI) weekly statistical supplement showed India's foreign exchange reserves rose for the third straight week, to $550.14 billion in the week through November 25. For the week ended November 18, the country's reserves were at $547.25 billion. However, a strong services activity reading helped Indian shares to stage recovery in the last leg of the trade. As per the survey report, India's services sector witnessed strong growth in the month of November, as business activity and sales rose at faster rates. The seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 56.4 in November from 55.1 in October. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- improved to 56.7 in November from 55.5 in October. Finally, the BSE Sensex fell 33.90 points or 0.05% to 62,834.60 and the CNX Nifty was up by 4.95 points or 0.03% to 18,701.05.

The US markets ended in red on Monday, with Nasdaq settling around cut of two percent,  on lingering uncertainty about the outlook for interest rates following last Friday's stronger-than-expected jobs data. Adding to the worries about where rates will peak, the Institute for Supply Management (ISM) released a report this morning showing U.S. service sector activity unexpectedly grew at an accelerated rate in the in the month of November. The ISM said its services PMI climbed to 56.5 in November from 54.4 in October, with a reading above 50 indicating growth in the sector. The increase surprised participants, who had expected the index to dip to 53.1. Meanwhile, new orders for U.S. manufactured goods jumped by more than expected in the month of October, according to a report released by the Commerce Department. The Commerce Department said factory orders shot up by 1.0 percent in October after rising by 0.3 percent in September. Street had expected factory orders to increase by 0.7 percent. The bigger than expected increase in factory orders came as orders for durable goods surged by 1.1 percent in October after edging up by 0.2 percent in September. Orders for transportation equipment led the way higher, soaring by 2.2 percent. The report said orders for non-durable goods also jumped by 1.0 percent in October after rising by 0.3 percent in the previous month. On the sectoral front, banking stocks turned in some of the market's worst performances on the day, dragging the KBW Bank Index down by 4.4 percent to its lowest closing level in a month. A sharp pullback by the price of crude oil also weighed on energy stocks, with crude for January delivery plunging $3.05 to $76.93 a barrel after reaching an early high of $82.72 a barrel. Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 4.0 percent and the NYSE Arca Oil Index dove by 3.0 percent.

Crude oil futures ended deeply in red on Monday as strong U.S. service data raised the prospects for more aggressive moves by the Federal Reserve. A report from the Institute for Supply Management (ISM) showed U.S. service sector activity unexpectedly grew at an accelerated rate in the in the month of November. The ISM said its services PMI climbed to 56.5 in November from 54.4 in October, with a reading above 50 indicating growth in the sector. The increase surprised economists, who had expected the index to dip to 53.1. Benchmark crude oil futures for January delivery fell $3.05 or 3.8 percent at $76.93 a barrel on the New York Mercantile Exchange. Brent crude for February delivery dropped $2.65 or 3.1 percent to settle at $82.92 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee ended lower against dollar on Monday, on account of sustained dollar demand from importers and banks. Traders overlooked Economic Advisory Council member Sanjeev Sanyal's statement that India is capable of sustaining an economic growth of 9 per cent for many years, even as he asserted that a high sustained GDP growth rate is key for the world to achieve the 2030 Sustainable Development Goals (SDGs). Besides, Reserve Bank of India's (RBI) weekly statistical supplement showed India's foreign exchange reserves rose for the third straight week, to $550.14 billion in the week through November 25. For the week ended November 18, the country's reserves were at $547.25 billion. On the global front, rouble weakened to a seven-week low against the dollar as a price cap on Russian oil came into force on Monday in a development that could reduce Russia's foreign currency export revenue. Finally, the rupee ended at 81.80 (Provisional), weaker by 47 paise from its previous close of 81.33 on Friday.

The FIIs as per Monday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 10622.15 crore against gross selling of Rs 10247.75 crore, while in the debt segment, the gross purchase was of Rs 1014.64 crore against gross selling of Rs 126.68 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.88 crore against gross selling of Rs 13.52 crore.

The US markets ended lower on Monday as investors spooked by better-than-expected data from the services sector re-evaluated whether the Federal Reserve could hike interest rates for longer. Asian markets are trading mostly in red on Tuesday after Wall Street sold off overnight on fears that the Fed will keep increasing interest rates. Indian markets ended flat on Monday tracking mixed global cues after robust U.S. jobs data released on Friday stirred anxiety over the pace of future rate increases. Today, markets are likely to make negative start tracking weak global cues. Besides, investors will track the Reserve Bank of Australia's policy decision today. It is expected to deliver a 25 bps rate hike. Back home, market participants will also keep eye on election exit poll results across Gujarat and Himachal Pradesh. Foreign fund outflow likely to dent sentiments in domestic markets. Provisional NSE data showed foreign institutional investors (FIIs) sold Rs 1,139.07 crore worth of shares on December 5. However, some support may come with a private report that India's central bank will probably start slowing the pace of interest-rate increases on Wednesday, signaling it's near the end of its aggressive tightening cycle. Traders may take note of another private report that the Unified Payments Interface (UPI), debit and credit cards, prepaid payment instruments like mobile wallets, and prepaid cards logged 23.06 billion transactions amounting Rs 38.3 lakh crore in the third quarter this year. Meanwhile, the GST Council in its next meeting is likely to discuss decriminalisation of offences under GST law, along with raising the threshold of launching prosecution to Rs 20 crore, from Rs 5 crore at present. There will be some buzz in power stocks as aggregate technical and commercial (AT&C) losses of power distribution utilities declined to 17 per cent in 2021-22 from 22 per cent in the previous year. Power ministry said reduction in AT&C losses improves finances of utilities (discoms), enabling them to better maintain the system and buy power as per requirement and benefit the consumers. Sugar stocks will be in focus with a private report that India's sugar output is likely to fall 7% this year as erratic weather conditions have cut cane yields, which could dampen exports from the world's biggest producer of the sweetener.

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

Nifty Top volumes

• IOC is planning to invest Rs 6 crore on the upgradation of supply locations and aviation fuel station in Goa (the coastal state). 
• HDFC Bank has raised Rs 15000 crore through allotment of 15000 Unsecured, Subordinated, Fully Paid-Up, Non-Convertible, Basel III Compliant Tier 2 Bonds on a private placement basis.
• NTPC has recorded 48% growth in coal mining output at 12.24 MMT for April-November 2022 as compared to 8.27 MMT of coal production in the same period of 2021. 
• Infosys has established new proximity center in Sweden.