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Indian markets ended in red for the second straight day on Monday owing to losses in index heavyweights ITC and Reliance Industries. Today, start of session is likely to be cautious amid rise in crude oil prices overnight as well as foreign fund outflows likely to dent domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 82.96 crore on July 24. Traders will be concerned with a private report that the recent rise in inflation has prompted Indian investors to push back rate cut expectations by at least a quarter to the middle of 2024, with a sustained rise in prices likely to prompt a further repricing. There will be some cautiousness with a private report that Indian fintech start-ups raised a total of $1.4 billion in the first half (H1) of 2023, a massive year-on-year (YoY) drop of 67 per cent from $4.3 billion raised in the same period last year. Traders may take note of the commerce ministry’s statement that India and the UK have concluded the 11th round of negotiations for a proposed free trade agreement (FTA) and the next round of talks will take place in the coming months. Meanwhile, the Securities and Exchange Board of India (Sebi) is working on an ambitious plan to settle secondary market trades on a real-time basis. Aviation industry stocks will be in focus as the government of India granted in-principle approval for the establishment of 21 new Greenfield Airports. These airports will be set up in different regions of the country to enhance connectivity and boost air travel accessibility. There will be some reaction in infrastructure industry stocks with report that the prices of TMT rebars -- a key requirement for infrastructure projects -- are trading at 24-month low levels and the trend is expected to continue for the next few quarters. Besides, the April-June quarter results (Q1FY24) will remain in limelight. On July 25, companies like Bajaj Auto, Tata Motors, Larsen & Toubro, Asian Paints, among many others will report the June quarter results.

The US markets ended higher on Monday as Chevron reported better-than-expected earnings and data showed that U.S. business activity grew at its slowest pace in five months in July. Asian markets are trading mostly in green on Tuesday with Chinese and Hong Kong markets rallying, after China's Politburo pledged to adjust and optimize policies in a timely manner for its ailing property sector.

Back home, Monday turned out to be a volatile session for Indian equity markets, with both Sensex and Nifty closing near their intraday low points, ahead of the US Fed's interest rate decision this week. Indices made a cautious start of the trading day, but managed to trade above neutral lines in morning deals, as the Reserve Bank of India said India’s forex reserves have swelled by $12.743 billion to $609.022 billion in the week ended July 14, making it one of the strongest weekly surges in the kitty in recent times. However, volatility witnessed over the street in afternoon deals as key indices swung between green and red, as foreign fund outflows also dented sentiments in the markets. Provisional data from the NSE showed that foreign institutional investors (FII) sold shares worth Rs 1,998.77 crore on July 21. Traders were concerned as retail inflation for farm workers and rural labourers inched up marginally to 6.31 per cent and 6.16 per cent, respectively in June as compared to 5.99 per cent and 5.84 per cent in May this year. In the last hour of the trade, losses got intensified in markets, following weak cues from European markets. Some pessimism came as a private report that consumer price inflation is expected to overshoot the Reserve Bank’s tolerance mark of 6 per cent again in July and August due to the sky high vegetable prices. Traders remained cautious, amid a private report stating that India's economy will grow at a solid pace for the rest of this fiscal year and next but well below its potential rate, and the employment situation will improve only slightly. Finally, the BSE Sensex fell 299.48 points or 0.45% to 66,384.78 and the CNX Nifty was down by 72.65 points or 0.37% to 19,672.35.

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