Indian equity benchmarks ended marginally higher on Monday amid choppy trade and tracking global markets. The key indices made cautious start, as traders got anxious with the former World Bank Chief Economist Kaushik Basu's statement that India's overall macroeconomic situation is in a recovery mode but the growth is concentrated at the top end, which is a worrying trend. Amid the rising inflationary trends, including the sharp increase in retail inflation last month, Basu said the country is facing stagflation and very carefully curated policy interventions are required to address the situation. Some pessimism also came as Engineering Export Promotion Council of India has expressed concern that the spread of Omicron, the new variant of coronavirus, may once again disrupt the global supply chain, which could lead to a slowdown in trading activities However, key gauges were seen slightly edging higher in morning deals, as traders took some support with the Department for Promotion of Industry and Internal Trade (DPIIT) Secretary, Anurag Jain's statement that investors are taking huge interest in the country's startup ecosystem and in the last year, annual fundings into startups have increased from $11 billion to $36 billion. The key benchmark indices continued to hold marginal gains in late afternoon deals, as some solace also came with depositories data showed foreign portfolio investors (FPIs) reversed the three-month selling streak in January by investing net Rs 3,117 crore in Indian markets, so far this month. They pumped Rs 1,857 crore into equities and Rs 1,743 crore into hybrid instruments during January 1-14. Market participants took a note of a private report stated that the rising uncertainty from the third wave of the pandemic will force the forthcoming Budget to push the fiscal pedal more to support the fragile recovery, and print in 6.5 per cent fiscal deficit as the government is likely to budget for around Rs 42 lakh crore of capex next fiscal.  Meanwhile, Finance Minister Nirmala Sitharaman held a pre-budget stakeholder consultation with BJP leaders as well as professionals, business leaders, academicians and economists associated with the party. Finally, the BSE Sensex rose 85.88 points or 0.14% to 61,308.91 and the CNX Nifty was up by 52.35 points or 0.29% to 18,308.10.

The US markets were closed on Monday on account of Martin Luther King, Jr. Day.

Indian rupee depreciated against dollar on Monday for second straight session as muted domestic equities and elevated crude oil prices weighed on investor sentiments. Weaker economic data, higher bond yields, a surge in crude oil prices and state-run banks dollar buying on behalf of importers weighed on rupee for the second day in trot. Some cautiousness come as former World Bank Chief Economist Kaushik Basu's statement that India's overall macroeconomic situation is in a recovery mode but the growth is concentrated at the top end, which is a worrying trend. Besides, foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 1,598.20 crore, as per stock exchange data. Finally, the rupee ended 74.24, weaker by 9 paise from its previous close of 74.15 on Friday.

The FIIs as per Monday's data were net sellers equity segment, while net buyers debt segment. In equity segment, the gross buying was of Rs 5041.04 crore against gross selling of Rs 7615.69 crore, while in the debt segment, the gross purchase was of Rs 1628.98 crore with gross sales of Rs 196.13 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.45 crore against gross selling of Rs 23.84 crore.

The US markets remained closed on Monday as the nation observed Martin Luther King Day, which is a federal holiday. Asian markets are trading mostly in green on Tuesday though the prospect of US rate hikes remained in focus among investors globally. Indian markets ended a volatile session with mild gains on Monday. Gains in auto and oil & gas shares pushed the headline indices higher. Today, the markets are likely to make flat-to-positive start following positive cues from Asian peers. Traders will be taking encouragement with RBI article stating that India's overall economic activity remains strong, driven by an upbeat consumer confidence and uptick in bank credit, and expectations that Omicron may turn out to be a flash flood rather than a wave have further brightened the prospects. It also said that India has attracted higher FDI flows and continues to remain among the top attractive destinations for international investors. Some support will also come as assuring all support to the exporting community, Commerce and Industry Minister Piyush Goyal said the exports target of $650 billion for both goods and services within the current financial year is possible to achieve. Meanwhile, a private survey report stated that in the wake of COVID-19 and new digital operations, banking and financial institutions have been struggling to deal with an increasing number of fraud incidents and the trend is expected to continue. Besides, tightening rules for initial public offering (IPO), Sebi has put a cap on the usage of the issue proceeds for unidentified future acquisitions and restricted the number of shares that can be offered by significant shareholders. Sugar industry stocks will be in limelight as industry body ISMA said India's sugar exports during October-December period jumped nearly four-fold to 17 lakh tonnes on higher demand from overseas. There will be some reaction in edible oil industry stocks as industry body SEA said oilmeals export fell 67 per cent to 1.7 lakh tonne in December with Indian products being uncompetitive in the global market. Telecom industry stocks will be in focus as the Department of Telecom amended telecom licences to enable service providers to roll out machine-to-machine communication -- a service which is considered as a key driver of 5G adoption -- in the country. There will be lots of earnings reaction based on the performance of the companies.

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

Nifty Top volumes

• IOC is planning to invest over Rs 7,000 crore in setting up city gas distribution networks in the cities for which it has secured a licence in the latest bidding round.  
• Tata Motors has launched the Safari DARK, the latest flagship addition to the company's successful DARK range. 
• NTPC is planning to raise $500 million plus green shoe option of $250 million through external commercial borrowing. 
• SBI has increased interest rates on fixed deposit by upto 10 basis points or 0.10 per cent.