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Indian markets opened nearly 0.6% higher amid continued fall in covid cases. Better than expected macroeconomic data also improved sentiments.

At 9.40am, the benchmark Sensex rose 0.6% to 49,025.92 points while Nifty gained 0.55% to 14,758 points.

"India's covid data indicates steady improvement, with fresh cases steadily declining and the latest number at 281,000 is indeed very positive. And the recovery numbers at 378,000 indicate a steady decline in total caseload. This means the present increase in lockdowns will be a temporary phase, which is likely to be ignored by the market," said V.K. Vijayakumar, chief investment strategist at Geojit Financial Services.

CPI-based retail inflation came in at a three-month low of 4.3% in April versus 5.5% in March and 7.2% in April 2020. This number is lower than Motilal Oswal forecast of 4.6%.

Additionally, IIP grew 22.4% in March supported by a low base. The number is in line with expectations of analysts.

"As the lockdown base fades, we expect CPI inflation to bounce back to an average of 5% in the remainder of H1FY22, ruling out the possibility of further rate cuts to support economic activity and sentiment. However, with the economic outlook remaining uncertain in light of the continuing pandemic, we expect the monetary policy stance to remain accommodative for much of 2021," said Aditi Nayar, chief economist at ICRA.

USA equities corrected by 1%-2.3% last week mainly led by increasing apprehensions among investors about Federal Reserve’s monetary policy stance after sharp spike in April Inflation. Notably, inflationary concerns led by sharp increase in commodity prices dragged equities down across the globe last week.

For the current week, minutes of The Federal Open Market Committee (FOMC) meeting, which will be published on Wednesday, will be in focus.

"We do not expect any major surprise from FOMC meeting minutes as it was held prior to weak job and higher inflation data. Speeches of Fed officials will be heard carefully by the market participants," said Binod Modi, head, strategy at Reliance Securities.

Asian share markets turned mixed on Monday as data on Chinese retail sales missed expectations, though industrial output stayed solid, while more evidence of global inflation pressures helped gold to a three-month peak.

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