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Indian markets ended higher on Monday as data showed India's wholesale price inflation declined for an eleventh straight month to turn negative in April. Today, the markets are likely to open in green tracking positive global cues. Market participants to track some select stocks amid the ongoing Q4 earnings season. Bank of Baroda, Bharti Airtel, Indian Oil, Granules, Jindal Steel, JK Paper will be on the radar ahead of their results. Some support will come as Commerce and Industry Minister Piyush Goyal said that a free trade agreement between India and four-nation bloc EFTA will help enhance two-way commerce, investment flows, job creation and economic growth. Traders may take note of report that the government has urged the heavy equipment manufacturers to produce such machinery in the domestic market, which will help reduce the country's imports worth over Rs 3,500 crore annually. However, some cautiousness may come as the government data showed that India’s exports contracted by 12.7 per cent, third month in a row, to $34.66 billion in April even as the trade deficit reduced to a 20-month low of $15.24 billion. The decline in exports is mainly on account of poor demand in India’s key destinations - the Europe and the US - and it may take some more months for the situation to improve. Traders may be concerned as a private weather forecaster suggests that southwest monsoon might be delayed and weak, and needs to be watched closely. Meanwhile, India is in talks with the EU to allow Indian energy auditors to conduct carbon verification of its exports on which the European Union's carbon tax, to be introduced on October 1 this year, will be levied. Oil & gas sector stocks will be in focus as the center revised the windfall tax on domestically produced crude oil, cutting the tax rate to zero from Rs 4,100 per tonne. Last month, the government scrapped the Special Additional Excise Duty (SAED) on export of diesel from Rs 0.5 per litre to nil which is to continue. There will be some reaction in tourism industry stocks as the United Nations World Tourism Organization (UNWTO) reported that international tourism is returning to pre-pandemic levels, with twice as many individuals travelling in the first quarter of 2023 as in the same period in 2022.

The US markets ended higher on Monday as reports of progress on debt ceiling talks outweighed data showing a substantial downturn in regional manufacturing activity in May. Asian markets are trading mostly in green on Tuesday amid a slew of Chinese economic data portrayed an uneven economic recovery.

Back home, Indian equity benchmarks ended on a positive note for a second straight day on Monday following firm trends in Asian and European markets. The gains were led by Realty, FMCG and Telecom stocks. Markets started the week on a firm note following a respite in the CPI inflation, which fell to an 18-month low of 4.7% in April on the back of a high base and easing price pressures across categories, giving the central bank elbow room to maintain an extended pause on policy rates. Sentiments got boost with Reserve Bank of India Governor Shaktikanta Das’ statement that the cooling off in headline inflation to 4.7 per cent during April is ‘very satisfying’. The governor said the release of the official data on Friday gives confidence that the ‘monetary policy is on the right track’. Foreign fund inflows also aided domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 1,014.06 crore on May 12, provisional data from the National Stock Exchange showed. Key indices extended gains in afternoon deals, after the data indicated that India’s inflation based on wholesale price index (WPI) turned negative for the first time since July 2020 at  (-) 0.92% for the month of April 2023 as against 1.34% in March 2023, on account of fall in prices of non-food articles, coal, electricity and mineral oils. Traders also took a note of Former Reserve Bank of India (RBI) governor Raghuram Rajan’s statement that India's growth path lies in leveraging its intrinsic strengths and becoming crucial to global supply chains by building on its historic culture of tolerance and respect for all. However, key gauges trimmed some gains in final minutes of trade, as India’s industrial production growth fell to a five-month low of 1.1% in March 2023. The poor performance of the power and manufacturing sectors was primarily responsible for this decline, with the manufacturing sector growing only 0.5% compared to 1.4% a year ago. Power generation declined by 1.6% in March 2023, compared to a growth of 6.1% last year. Finally, the BSE Sensex rose 317.81 points or 0.51% to 62,345.71 and the CNX Nifty was up by 84.05 points or 0.46% to 18,398.85.

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