Indian equity benchmarks ended on a positive note for a second straight day on Monday following firm trends in Asian and European markets. The gains were led by Realty, FMCG and Telecom stocks. Markets started the week on a firm note following a respite in the CPI inflation, which fell to an 18-month low of 4.7% in April on the back of a high base and easing price pressures across categories, giving the central bank elbow room to maintain an extended pause on policy rates. Sentiments got boost with Reserve Bank of India Governor Shaktikanta Das' statement that the cooling off in headline inflation to 4.7 per cent during April is very satisfying. The governor said the release of the official data on Friday gives confidence that the monetary policy is on the right track. Foreign fund inflows also aided domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 1,014.06 crore on May 12, provisional data from the National Stock Exchange showed. Key indices extended gains in afternoon deals, after the data indicated that India's inflation based on wholesale price index (WPI) turned negative for the first time since July 2020 at (-) 0.92% for the month of April 2023 as against 1.34% in March 2023, on account of fall in prices of non-food articles, coal, electricity and mineral oils. Traders also took a note of Former Reserve Bank of India (RBI) governor Raghuram Rajan's statement that India's growth path lies in leveraging its intrinsic strengths and becoming crucial to global supply chains by building on its historic culture of tolerance and respect for all. However, key gauges trimmed some gains in final minutes of trade, as India's industrial production growth fell to a five-month low of 1.1% in March 2023. The poor performance of the power and manufacturing sectors was primarily responsible for this decline, with the manufacturing sector growing only 0.5% compared to 1.4% a year ago. Power generation declined by 1.6% in March 2023, compared to a growth of 6.1% last year. Finally, the BSE Sensex rose 317.81 points or 0.51% to 62,345.71 and the CNX Nifty was up by 84.05 points or 0.46% to 18,398.85.

The US markets ended lackluster session in green on Monday, with the tech-heavy Nasdaq reaching its best closing level in well over eight months, while the Dow snapped a five-session losing streak. Wall Street got some support amid optimism about an eventual agreement on raising the U.S. debt following comments from Treasury Secretary Janet Yellen. Yellen said the administration and congressional Republicans are making progress in their negotiations over federal spending and raising the debt limit. President Joe Biden also expressed optimism about the talks in remarks to reporters over the weekend. Though, there was some cautiousness ahead to the release of some key economic data in the coming days. Remarks by Federal Reserve officials are also likely to remain on investors' radar this week, with Fed Chair Jerome Powell due to participate in a Perspectives on Monetary Policy panel before the Thomas Laubach Research Conference on Friday. Meanwhile, the New York Fed released a report showing a substantial downturn in regional manufacturing activity in the month of May. The report said the general business conditions index plunged to a negative 31.8 in May from a positive 10.8 in April, with a negative reading indicating a contraction. Street had expected the index to drop to a negative 2.5. On the sectoral front, Semiconductor stocks moved sharply higher over the course of the session, resulting in a 2.7 surge by the Philadelphia Semiconductor Index. Substantial strength also emerged among banking stocks, as reflected by the 2.6 percent jump by the KBW Bank Index. Computer hardware stocks also showed a strong move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 2.5 percent.

Crude oil futures ended sharply higher on Monday amid expectations of tightening supplies in Canada and elsewhere. According to reports, wildfires in Alberta, Canada, has resulted in the shutting down of large quantity of crude supply. As per report, close to 300,000 barrels of oil equivalent per day production was shut last week in Alberta. Also, some support came amid speculation that OPEC and allies will plan additional output cuts during the second half of the current year. Though, upside remained capped amid concerns about the outlook for demand amid fears of a potential recession in the U.S. Benchmark crude oil futures for June delivery rose $1.07 or about 1.5 percent to settle at $71.11 a barrel on the New York Mercantile Exchange. Brent crude for July delivery added $1.06 or about 1.4 percent to settle at $75.23 a barrel on London's Intercontinental Exchange.

Indian rupee ended lower against dollar on Monday weighed down by the strength of the American currency in the overseas market. Traders were worried after India's industrial production growth measured in terms of the Index of Industrial Production (IIP) slipped to five-month low of 1.1 per cent in March 2023 from 5.8 per cent in February 2023. The previous lowest level of growth was recorded in October 2022 at a contraction of 4.1 per cent. The factory output growth stood at 2.2 per cent in March 2022. Traders ignored report that India's inflation based on wholesale price index (WPI) turned negative for the first time since July 2020 at (-) 0.92% for the month of April 2023 as against 1.34% in March 2023. On the global front, U.S. dollar fell slightly from a five-week high on Monday. Meanwhile, the Turkish lira sank to a near record low as weekend elections looked headed for a runoff, while the Thai baht rallied after a more decisive election result. Finally, the rupee ended at 82.33 (Provisional), weaker by 15 paise from its previous close of 82.18 on Friday.

The FIIs as per Monday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 9178.44 crore against gross selling of Rs 7591.10 crore, while in the debt segment, the gross purchase was of Rs 609.21 crore against gross selling of Rs 1761.21 crore. Besides, in the hybrid segment, the gross buying was of Rs 12.53 crore against gross selling of Rs 16.91 crore.

The US markets ended higher on Monday as reports of progress on debt ceiling talks outweighed data showing a substantial downturn in regional manufacturing activity in May. Asian markets are trading mostly in green on Tuesday amid a slew of Chinese economic data portrayed an uneven economic recovery. Indian markets ended higher on Monday as data showed India's wholesale price inflation declined for an eleventh straight month to turn negative in April. Today, the markets are likely to open in green tracking positive global cues. Market participants to track some select stocks amid the ongoing Q4 earnings season. Bank of Baroda, Bharti Airtel, Indian Oil, Granules, Jindal Steel, JK Paper will be on the radar ahead of their results. Some support will come as Commerce and Industry Minister Piyush Goyal said that a free trade agreement between India and four-nation bloc EFTA will help enhance two-way commerce, investment flows, job creation and economic growth. Traders may take note of report that the government has urged the heavy equipment manufacturers to produce such machinery in the domestic market, which will help reduce the country's imports worth over Rs 3,500 crore annually. However, some cautiousness may come as the government data showed that India's exports contracted by 12.7 per cent, third month in a row, to $34.66 billion in April even as the trade deficit reduced to a 20-month low of $15.24 billion. The decline in exports is mainly on account of poor demand in India's key destinations - the Europe and the US - and it may take some more months for the situation to improve. Traders may be concerned as a private weather forecaster suggests that southwest monsoon might be delayed and weak, and needs to be watched closely. Meanwhile, India is in talks with the EU to allow Indian energy auditors to conduct carbon verification of its exports on which the European Union's carbon tax, to be introduced on October 1 this year, will be levied. Oil & gas sector stocks will be in focus as the center revised the windfall tax on domestically produced crude oil, cutting the tax rate to zero from Rs 4,100 per tonne. Last month, the government scrapped the Special Additional Excise Duty (SAED) on export of diesel from Rs 0.5 per litre to nil which is to continue. There will be some reaction in tourism industry stocks as the United Nations World Tourism Organization (UNWTO) reported that international tourism is returning to pre-pandemic levels, with twice as many individuals travelling in the first quarter of 2023 as in the same period in 2022.

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

Nifty Top volumes

• Hero MotoCorp is gearing up for highest ever model introductions in FY24 as it looks to consolidate market share especially in the premium bike segment.
• UltraTech Cement's wholly owned subsidiary -- UltraTech Nathdwara Cement has commissioned 0.8 mtpa brownfield cement capacity at Neem Ka Thana, Rajasthan. 
• Bharti Airtel is offering a diverse range of postpaid plans to cater to its subscribers, with prices ranging from Rs 399 to Rs 1499. 
• ICICI Prudential Life Insurance Company, a joint venture between ICICI Bank and Prudential Corporation Holdings, has launched a debt fund ICICI Pru Constant Maturity Fund.