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Indian markets ended over 1 percent higher on Monday led by gains in metals, banks and financial stocks amid positive global cues. Today, the markets are likely to make cautious start amid mixed global cues. Slight fall in daily coronavirus cases is likely to support the market sentiments. India reported a slight dip in the number of fresh Covid infections and fatalities on Tuesday with 319,435 cases and 2,764 deaths, Worldometer showed. Traders may take note of report that the commerce ministry said it has started a COVID-19 helpdesk to help resolve issues of exporters and importers pertaining to international trade such as customs clearance delays and banking matters. The Directorate General of Foreign Trade (DGFT), an arm of the ministry, took this initiative to monitor the status of exports and imports, and difficulties being faced by trade stakeholders in view of the surge in COVID-19 cases. However, there may be some cautiousness as global forecasting firm Oxford Economics revised downwards its India GDP growth forecast for 2021 to 10.2 percent from 11.8 percent previously, citing the country's escalating health burden, faltering vaccination rate and lack of a convincing government strategy to contain the pandemic. Traders may be concerned as the Reserve Bank of India (RBI) warned that the resurgence of the Covid-19 pandemic could bring back inflationary pressures in the country. RBI in its state of the economy report said the resurgence in Covid-19, if not contained in time, risks protracted restrictions and disruptions in supply chains with consequent inflationary pressures. Also, Former Finance Secretary S C Garg said the fresh COVID-19 wave and consequent local lockdowns may bring down the economic growth to less than 10 per cent in the current fiscal. There will be some reaction in aviation stocks as the Directorate General of Civil Aviation (DGCA) announced that the fare cap on domestic flights would be extended till May 31 and the flights would operate with 80 percent of pre-COVID level passenger capacity. There will be lots of important earnings announcements too, to keep the markets in action.

The US markets ended mostly higher on Monday as investors brace for a deluge of earnings reports from big US companies. Asian markets are trading mostly in red on Tuesday as investors await the Bank of Japan’s interest rate decision.

Back home, Indian equity benchmarks ended the Monday’s trade with significant gains with frontline gages settled above their crucial 48,300 (Sensex) and 14,450 (Nifty) levels. Markets started the session with a gap up opening as investors reacted optimistically to positive earnings updates and the US announcement that it would remove bottlenecks in the export of raw materials essential for the production of vaccines in India. Traders also took some support with Union Minister Nitin Gadkari’s statement that the pandemic has caused a slowdown in India but the country's inherent resilience and capability will help it transform into a new India with a faster growth path fuelled by infrastructure. Traders took note of report that the centre has allowed state governments to borrow 75% of their annual market borrowing limit of 4% of their respective Gross State Domestic Product (GSDP) in the first nine months of the current fiscal year. Markets pare some of their initial gains but traded comfortably throughout the session as traders remained optimistic, as the Finance Ministry has relaxed the spending guidelines to enable ministries and departments to undertake capital expenditure totalling Rs 44,000 crore envisaged in the budget for 2021-22, to boost the economy grappling with the fresh COVID-19 wave. According to an office memorandum (OM) issued by the Finance Ministry, the monthly/quarterly expenditure plan (MEP/QEP) ceilings and restrictions will not apply for expenditure under the capital heads under the budget. Traders also got some support with RBI’s data stating that the foreign exchange reserves rose by $1.193 billion to reach $582.406 billion in the week ended April 16. In the previous week ended April 9, the forex kitty had surged by $4.344 billion to $581.213 billion. Finally, the BSE Sensex surged 508.06 points or 1.06% to 48,386.51, while the CNX Nifty was up by 143.65 points or 1.00% to 14,485.00.

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