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Indian markets closed higher on Monday after losing almost three percent of their value in the past three sessions, aided by gains in financial, FMCG and IT stocks though losses in metal shares played spoilsport. Today, markets are likely to get optimistic start tailing strength in global peers. Investors awaited the outcome of a two-day FOMC meeting due to begin later in the day, wherein the Fed is widely expected to decide on a 75 basis-point hike in the key lending rates. Foreign fund inflows likely to support the domestic sentiments. Foreign institutional investors (FIIs) have net bought shares worth Rs 312.31 crore on September 19, as per provisional data available on the NSE. Some support will come with a private survey report indicating that Indian consumers are concerned about rising costs but 71 per cent of them believe the economy will recover within a year. Traders may take note of report that capital markets regulator Sebi has put in place a new framework which will prevent misuse of clients' securities and funds by their stock brokers. Meanwhile, food secretary Sudhanshu Pandey said the Centre will soon invite private players along with Food Corporation of India and other state agencies to procure foodgrains for buffer stock. However, there may be some cautiousness as India Ratings expects the current account deficit to hit a 36-quarter high of 3.4 per cent of GDP or $28.4 billion in the June quarter, against a 0.9 per cent surplus a year ago. Some pessimism may come as surplus liquidity in the banking system as measured by absorption of excess funds by the Reserve Bank of India (RBI) fell sharply at the end of the last week due to outflows on account of advance tax payments. According to the RBI data, the net liquidity absorbed by the central bank on September 16 was at Rs 3,243.57 crore, much lower than the average of Rs 56,809.92 crore in the preceding four days of the week. There will be some buzz in sugar industry stocks as Food Secretary Sudhanshu Pandey said the government will soon announce export quota of sugar for next marketing year starting October. Banking stocks will be in focus as India Ratings has revised credit growth estimate for FY23 to 13 per cent from 10 per cent due to factors like uptick in working capital demand, while maintaining a stable outlook on banks. There will be some reaction in oil industry stocks as the oil ministry sought a review of the two-and-a-half-month old windfall profit tax on domestically produced crude oil saying it goes against the principle of fiscal stability provided in contracts for finding and producing oil. Besides, government data showed India's crude oil imports fell more than 13% in August month-on-month, as monsoon rains restricted activity and slowed consumption in the world's third-biggest oil consumer.

The US markets ended higher on Monday thanks to a technical rebound and bargain-hunting after last week's nightmarish run. Asian markets are trading in green on Tuesday following overnight gains on Wall Street.

Back home, Indian equity benchmarks bounced back on Monday after a three-day fall and ended with gains of over half percent, largely helped by buying in FMCG, Auto and TECK counters despite weakness in global market. Key gauges made cautious start, as traders were concerned with data from Reserve Bank showed India Inc's investment in their overseas ventures dropped by 59 per cent on an annual basis to $1.03 billion in August this year. Some pessimism also came in as the country's foreign exchange reserves declined by $2.234 billion to stand at $550.871 billion for the week ended September 9.  However, key indices quickly recovered the lost ground and traded higher, taking support from the finance ministry’s statement that gross direct tax collections grew 30 per cent to Rs 8.36 lakh crore till September 17 of current fiscal year on higher advance tax mop-up buoyed by the economic revival post pandemic. Some support also came as foreign investors pumped Rs 12,000 crore into the Indian equity market so far this month on hopes that global central banks, particularly the US Fed, may go slow on rate hikes as inflation starts to cool off. Markets continued to trade in fine fettle in late afternoon deals, as traders took some solace with the Monthly Economic Report of the Department of Economic Affairs, Ministry of Finance stating that India retained its status as an attractive destination among a set of developed and developing economies, as the 5th largest recipient of FDI in the April-June quarter. According to the report released, during Q1 of 2022, India was the 5th largest recipient of FDI among the defined set of developed and developing economies, as a buoyant growth outlook coupled with steady improvement in ease of doing business and supportive government policies retained India as an attractive business destination. Some optimism also came with Prime Minister Narendra Modi’s statement that Indian economy is expected to grow by 7.5 per cent this year and it will be the highest among the world's largest economies. He said India is making progress to become a manufacturing hub while highlighting various aspects of the country's economy. Finally, the BSE Sensex rose 300.44 points or 0.51% to 59,141.23 and the CNX Nifty was up by 91.40 points or 0.52% to 17,622.25.

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