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Indian markets ended sharply lower on Monday as financials and metals dragged the indices amid weak global cues as signs of growing inflationary pressures. Today, the markets are likely to extend previous session’s losses with negative start following weakness in global peers amid concerns over the resurgence of coronavirus cases in many countries. Traders may also choose to remain on the sidelines ahead of the market holiday on Wednesday on account of Bakri-Id, resulting in lower volumes. There will be some cautiousness with a private report that Investments by private equity and venture capital funds declined by 22 per cent to $5.4 billion in June, as compared to the $6.9 billion in the year-ago period. However, some respite may come later in the day with Union minister Pankaj Chaudhary’s statement that Indian economy is showing signs of revival since the peaking of second COVID wave in the first half of May on the back of targeted fiscal relief, strong push for capital expenditure, and a rapid vaccination drive. Additionally, notwithstanding the second wave of COVID-19, Chief Economic Adviser (CEA) K V Subramanian expressed hope that economic growth during the current financial year would be around 11 per cent as projected in the latest Economic Survey. He also said the overall impact of the second wave on the economy will not be very large. Some support may come as at 29,424, daily Covid-19 cases in India fell below the 30,000-mark to its lowest count in 125 days while the deaths from the virus dipped to a 111-day low of 373. The total caseload stands at 31,173,019 and death toll at 414,513. Aviation industry stocks will be in focus as the country's aviation regulator said around 31.13 lakh domestic passengers travelled by air in June, 47 per cent higher than the 21.15 lakh who travelled in May. According to the Directorate General of Civil Aviation (DGCA), 57.25 lakh people had travelled within the country by air in April. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets ended lower on Monday as a rise in worldwide coronavirus cases and increasing US deaths drove investors out of risky assets, crushing bond yields and share prices. Asian markets are trading in red on Tuesday following an overnight tumble for stocks on Wall Street.

Back home, Indian equity benchmarks closed deep in red on Monday amid negative global cues. Markets have opened gap down, as traders got anxious with Niti Aayog CEO Amitabh Kant expressed concern over high food inflation due to higher prices of oilseeds and edible oils. Some cautiousness also came as India recorded 38,325 fresh Covid-19 cases in the last 24 hours, taking the total caseload to 31,143,595. The death count increased to 414,141 with 501 new fatalities. Traders were also worried amid reports that foreign portfolio investors (FPIs) have pulled out Rs 4,515 crore from the equities segment in the first half of July as they turn cautious towards the Indian market. But, key indices managed to reduce some losses at the end of the day, taking support from Services Export Promotion Council (SEPC) stating that the country's services exports are expected to grow 10 per cent in 2021-22 due to healthy growth of sectors such as professional and management consulting, audio visual, freight transport, and telecommunications. Some support also came with Finance Minister Nirmala Sitharaman’s statement that India's continuous wide-ranging reforms make the country an attractive destination for foreign investments. She also mentioned about stimulus packages announced recently; as well as strong, calibrated relief and reforms during COVID leading to sharp decline in new infections with ramping up of the vaccination programme. Meanwhile, RBI data showed that the country's foreign exchange reserves increased by $1.883 billion to touch a record high of $611.895 billion in the week ended July 9. Finally, the BSE Sensex fell 586.66 points or 1.10% to 52,553.40, while the CNX Nifty was down by 171.00 points or 1.07% to 15,752.40.

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