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Rising for a second straight session, Indian equity benchmarks ended on a buoyant note and gained nearly one and a half percent on Monday, taking positive cues from Asian and global markets. After the gap-up start, the benchmarks gradually inched higher, as traders got encouragement with SBI Research in its latest report stated that the income of farmers has grown in the range of 1.3-1.7 times in FY22 from the FY18 levels on average while grain exports soared to over $50 billion. For certain crops in some states (like soyabean in Maharashtra and cotton in Karnataka) farmers' income more than doubled in FY22 from FY18 levels. Traders were also getting support with Reserve Bank of India (RBI) in its article stating that the impact of US Federal Reserve’s announcement in November last year to taper its asset purchases was moderate on Indian financial markets largely due to the country’s strong external position in 2021. Some support also came after private report stated that India’s real gross domestic product (GDP) growth for the financial year 2022-23 is expected to be above 7 percent despite global headwinds.

Domestic sentiments remained firm in second half of trading session, after the Reserve Bank of India said in its latest monthly bulletin that the Indian economy remains resilient despite formidable global headwinds and amidst fears of a recession. The bulletin said that in spite of geopolitical spillovers, 'There are sparks in the wind that ignite the innate strength of the economy and set it on course to becoming the fastest growing economy in the world, though besieged it might be by fears of recession'. Some support also came after Agriculture Minister Narendra Singh Tomar expressed hope that monsoon rains, which are crucial for Kharif sowing, will progress in the coming days and said it is too early to comment on the paddy acreage. Traders also took a note of the Reserve Bank of India (RBI) data showed that the RBI remained net buyer of the US currency in May, after it purchased $2.001 billion on net basis from the spot market. The RBI purchased $10.143 billion from the spot market and sold $8.142 billion. Traders overlooked Credit Rating Agency ICRA’s report stated that states have budgeted 36 per cent higher capital expenditure during this financial year (FY23), which may lead to a sharp rise in their fiscal deficit to Rs 8.4 lakh crore.

On the global front, Asian markets settled higher on Monday as fairly encouraging economic data from the U.S. and upbeat earnings updates from some top companies helped lift sentiment. Traders also reacted positively to a slew of U.S. economic data, including a report showing retail sales jumped by more than expected in the month of June and U.S. consumer sentiment unexpectedly showed a modest improvement in the month of July. European markets were trading higher ahead of this week's ECB meeting and the expected resumption of an important gas pipeline that is currently closed for maintenance.

Finally, the BSE Sensex rose 760.37 points or 1.41% to 54,521.15 and the CNX Nifty was up by 229.30 points or 1.43% to 16,278.50. 

The BSE Sensex touched high and low of 54,556.66 and 54,034.97, respectively. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.49%, while Small cap index was up by 1.39%.

The top gaining sectoral indices on the BSE were IT up by 3.07%, TECK up by 2.96%, Metal up by 2.72%, Bankex up by 2.08% and Basic Materials up by 1.97%, while FMCG down by 0.04% was the lone losing index on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.36%, Infosys up by 4.16%, Tech Mahindra up by 3.67%, Bajaj Finserv up by 3.46% and Axis Bank up by 3.31%. On the flip side, Dr. Reddy's Lab down by 1.70%, HDFC Bank down by 1.19%, Mahindra & Mahindra down by 0.86%, Maruti Suzuki down by 0.84% and Nestle down by 0.76% were the top losers.

Meanwhile, SBI Research in its latest report has said that the income of farmers has grown in the range of 1.3-1.7 times in FY22 from the FY18 levels on average while grain exports soared to over USD 50 billion. For certain crops in some states (like soyabean in Maharashtra and cotton in Karnataka) farmers' income more than doubled in FY22 from FY18 levels.

The increase in the income of farmers engaged in cash crops has been more prominent compared to farmers growing non-cash crops. This also has led to an increase in the share of agriculture in the GDP to 18.8 per cent from 14.2 per cent, the report said. This rise was also due to the shrinkage of the industrial and services contribution to the economy due to the deadly second wave of the pandemic.

Further, the report, based on key farming states like Maharashtra, Rajasthan, MP, UP, Karnataka, and Gujarat among others, noted that allied/non-farm income showed a significant increase of 1.4-1.8 times in the majority of states in tandem with farm income during this period, substantiating the trend in the 77th National Sample Survey that said source of farmers income has become increasingly diverse apart from crops. Besides, the report also urges the government to launch a livelihood credit card by targeting at least 1 million farmers every year and an omnibus credit guarantee fund for Rs 5 lakh crore agri credit push.

The CNX Nifty traded in a range of 16,287.95 and 16,142.20. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.75%, Indusind Bank up by 4.29%, Infosys up by 4.22%, Tech Mahindra up by 3.72% and Bajaj Finserv up by 3.50%. On the flip side, Dr. Reddy's Lab down by 1.85%, Britannia Industries down by 1.82%, HDFC Bank down by 1.02%, Mahindra & Mahindra down by 0.90% and Nestle down by 0.72% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 88.97 points or 1.24% to 7,247.98, France’s CAC increased 84.82 points or 1.41% to 6,120.82 and Germany’s DAX increased 170.29 points or 1.32% to 13,035.01.

Asian markets settled higher on Monday, tracking rebound in Wall Street stocks last Friday followed by upbeat earnings news and slew of US economic data, including retail sales data. Report from the Commerce Department showed retail sales jumped 1 percent in June after edging down by a revised 0.1 percent in May. A separate report showed that the consumer sentiment index inched up to 51.1 in July from a record low 50 in June. Seoul shares gained after a survey showed US consumers' inflation expectations eased in July on the back of a drop in oil prices. Chinese shares gained after the governor of the country's central bank vowed to increase implementation of prudent monetary policy to support the real economy. Hong Kong shares also rose as Chinese regulators stepped up efforts to encourage lenders to extend loans to qualified real estate projects following a widening mortgage-payment boycott on unfinished houses. Meanwhile, market in Japan was closed for the Marine Day holiday.

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