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Indian markets ended higher on Monday after the U.S. Federal Reserve Chair Jerome Powell made comments to indicate the Fed may leave interest rates steady at its next meeting in June. Today, markets are likely to get an optimistic start tracking positive cues from global markets. Foreign fund inflows likely to provide flip to the markets. Foreign institutional investors (FIIs) bought shares worth Rs 922.89 crore on May 22, provisional data from the National Stock Exchange showed. Some support will come as a Reserve Bank article said India’s growth in the April-June quarter is expected to be driven by private consumption, supported by reviving rural demand, and renewed buoyancy in manufacturing. Traders will be taking encouragement with Reserve Bank of India (RBI) governor Shaktikanta Das’ statement that the central bank’s announcement of withdrawal of Rs 2,000 notes will have very marginal impact on the economy because it constitutes only 10.8 per cent of the currency in circulation. Some optimism will come as the federal finance ministry in its monthly economic review said that domestic demand will aid India’s economy and help lay the foundation for the capex cycle, despite global headwinds that pose a downside risk to growth. Traders may take note of Jeremy Zook, a director at Fitch Ratings and the primary rating analyst for India, stating that the Indian government will try its best to meet the challenging fiscal deficit target of 4.5 percent of the GDP by 2025-26. Meanwhile, think tank GTRI said in a report that the government should not extend fiscal support under the production-linked incentive scheme (PLI) to small firm-dominated products like leather shoes and handicraft as the move may shift business away from those enterprises. Global Trade Research Initiative (GTRI) said small firms need assistance like access to technology and low-cost finance and not PLI. Investors await more of financial results from India Inc for domestic cues, with Ashok Leyland, Biocon, Dixon Technologies and NMDC due to post their earnings later in the day.

The US markets ended mostly in green on Monday as investors awaited new updates on debt ceiling negotiations and Treasury Secretary Yellen said that the likelihood of the Treasury paying all U.S. bills by June 15th is quite low. Asian markets are trading mostly higher on Tuesday despite no deal over debt limit.

Back home, Indian equity benchmarks ended higher on Monday, with Sensex and Nifty garnering gains of 234 and 111 points, respectively, after the U.S. Federal Reserve Chair Jerome Powell made comments Friday to indicate the Fed may leave interest rates steady at its next meeting in June. Indices made a negative start of the day, as investors remain worried about the ongoing debt ceiling negotiations in the US, the resilience of the banking space and the geopolitical situation in Europe. However, markets soon staged recovery and remained higher for the whole day. Support came in as the RBI said rising for the second consecutive week, India's forex kitty jumped $3.553 billion to $599.529 billion for the week ended May 12. The overall reserves had jumped by $7.196 billion to $595.976 billion for the previous reporting week.  Some optimism also came in as the engineering export promotion council said India’s exports of engineering goods to Russia jumped 11 times in April this year to $133.6 million as compared to year-ago month while the US and China markets continued to soften. Firm trade persisted over the Dalal Street in afternoon deals, as sentiments were optimistic, after the provisional payroll data released by the retirement fund body showed that formal sector workers under the Employees’ Provident Fund Organisation surged by 13.2% to 13.9 million in 2022-23 compared to 12.2 million in 2021-22. However, upside remained capped, as the finance ministry said in its Monthly Economic Review for April that India's economy is likely to see downside risks to growth and upside risks to inflation, partly due to challenges in the country's external sector as well as weather-related uncertainties. Finally, the BSE Sensex rose 234.00 points or 0.38% to 61,963.68 and the CNX Nifty was up by 111.00 points or 0.61% to 18314.40.  

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