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Indian markets ended higher on Monday with marginal gains amid weak cues from Asia and Europe. Today, domestic markets are likely to get negative start amid mixed global cues. Traders likely to remain on sidelines ahead of the Reserve Bank of India's MPC meeting to begin later in the day. Outcome of the meeting will be on August 10. The central bank is expected to maintain a status quo on the repo rate despite the recent substantial rise in the prices of vegetables, cereals, and pulses in the country. Foreign fund outflows likely to dent sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) sold shares worth net Rs 1,892.77 crore on August 07. Traders will be concerned as the team, led by researchers at the University of East Anglia (UEA) and the University of Cambridge, UK, found that India's sovereign credit rating could be downgraded due to the impact of climate change and the rise in temperature volatility by as early as the 2030s. It added deferring green investments will increase costs of borrowing for nations, which will translate into higher costs of corporate debt. Traders may take note of report that the government think-tank Niti Aayog is looking at tax-related issues, including inverted duty structure in three sectors of engineering, leather, and textiles. The issues are likely to be taken up with higher authorities for their resolution to promote the growth of these sectors. Meanwhile, the Securities and Exchange Board of India (Sebi) has laid out its reform agenda for the ongoing financial year, proposing measures around digital assurance of financial statements, making e-voting more accessible, limiting risks in derivatives, a new pricing discovery mechanism for delisting, and greater disclosures for unlisted companies under a conglomerate. IT stocks will be in limelight after reports that top companies such as TCS, Infosys and HCL Tech are looking to hire 40 percent less this fiscal. Shares of state-run banks are likely to be in focus with a private report that the aggregate net profit more than doubled to Rs 34,418 crore in Q1 owing to treasury gains and healthy growth in net interest income (NII), backed by strong credit offtake. There will be some reaction in gaming industry stocks with a private report that the recently proposed 28 per cent goods and services tax (GST) on online games involving real money will not impact the taxation on e-sports, such as FIFA and League of Legends, or leading titles on PlayStation, Xbox, and Nintendo platforms. 

The US markets ended higher on Monday with financials, consumer services and industrial stocks pacing the gainers ahead of key inflation readings. Asian markets are trading mixed on Tuesday as investors awaited key inflation readings from the U.S. and China. Chinese trade data for July is also awaited later in the day.

Back home, Indian equity benchmarks ended higher for the second consecutive session on Monday primarily propelled by strong performances in the Healthcare, Telecom and IT sectors. Markets started the week on a firm note and stayed in green for whole day as traders took support with K V Kamath, chairman of the National Bank for Financing Infrastructure and Development (NaBFID), expressed his confidence in India’s potential to achieve the $5-trillion economy target within 18 months. Some optimism also came with data from the National Securities Depository (NSDL) showing that foreign portfolio investors (FPIs) have remained net buyers in Indian stock markets for the fifth straight month. FPIs bought Indian stocks worth Rs 7,936 crore, Rs 11,631 crore, Rs 43,838 crore, Rs 47,148 crore, and Rs 46,618 crore in March, April, May, June, and July, respectively. Key gauges continued their trade in green in late afternoon deals, as investors braced for upcoming RBI policy meeting. Monetary Policy Committee’s (MPC) meeting is scheduled on August 8-10. There are expectations that the Reserve Bank is likely to continue with the pause on the key interest rate at its upcoming monetary policy review. Traders took note of report that the number of income tax returns filed between April-June 2023-24 nearly doubled to over 1.36 crore over the previous year. As per the comparative statistics of ITR filing available on the I-T e-filing portal, over 70.34 lakh tax returns were filed in April-June 2022-23. Meanwhile, with an aim to review the progress of talks on the proposed free trade agreement (FTA), high-level meetings between India and the European Union (EU) will be held this month. The EU officials are coming for the G20 trade ministers meeting this month in Jaipur. There is a high-level meeting at the minister level on August 26 in the national capital between India and the EU. The G20 Trade and Investment Ministerial Meeting, under India's G20 Presidency, is scheduled at Jaipur on August 24-25. Finally, the BSE Sensex rose 232.23 points or 0.35% to 65,953.48 and the CNX Nifty was up by 80.30 points or 0.41% to 19,597.30.

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