Domestic equity markets witnessed notable losses on Tuesday as intensified selling in the rate sensitive counters during latter part of the day pulled the indices sharply lower. All sectoral indices of the BSE finished lower in trade with realty, bankex and public sector undertaking counters taking the lead. After starting the day on a positive note, the benchmark indices trimmed their gains in mid-morning trades to turn negative. Weak start for European equities and lower US index futures dragged the local indices to their day's lows in the late afternoon session. Australian central bank's decision to hold the key rates steady at 3.75% also dampened investors' sentiments. Volatility was higher in the last hour of trade. The NSE's 30-share Nifty closed below the crucial 4850-level while the BSE's 30-share Sensex finished the day almost 360 points lower from the day's high. Though the global economy has continued its strong performance in the new calendar year, investors are still skeptical about stupendous gains in equities in 2010 after strong run-up last year. Divestment candidate, NTPC saw sharp cuts in trade as the government fixed the benchmark price for its proposed follow-on public offer (FPO), at Rs 201 per share against the earlier expectations of around Rs 265 a piece. Big boy, Reliance Industries (RIL) also declined by almost two percent in trade. The second line stocks were no exception to the sell-off. Finally, the BSE Sensex plummeted 192.59 points or 1.18% to end at 16,163.44 while the S&P CNX Nifty stumbled 69.60 points or 1.42% to close at 4830.10.

The US markets closed higher for the second consecutive day, it was the home sales report that presented the latest bit of encouraging news on the economy. The slew of good economic reports has brought a positive tone to the markets. The other factors that supported the markets were the some good earnings report and the statement of Treasury Secretary Tim Geithner, who told the Senate Finance Committee that the economy is in better shape than a year ago but that the government still needs to take steps to bring down unemployment. The Dow Jones Industrial Average gained 111.32 points, or 1.09%, to 10,296.85. The S&P 500 index rose 14.13 points, or 1.30%, to 1,103.32, while the Nasdaq composite index closed higher by 18.86 points, or 0.87%, to 2,190.06.

Crude prices surged on Tuesday tracking the gains in stock markets and encouraging economic data, the weak dollar. Though American Petroleum Institute data released Tuesday showed crude supplies rose 4.7 million barrels in the week to January 29, but it was only after the trade got settled for the day and before that technical strength in the crude led traders to cover their short positions. Benchmark crude for March delivery rose $2.80, or 3.76 percent, to settle at $77.23 a barrel, trading from $74.40 to $77.41 on the New York Mercantile Exchange. In London, March Brent crude rose $2.95 to settle at $76.06 a barrel.

The Indian rupee closed higher on Tuesday. The domestic currency started well, taking positive cues from the regional markets and also on the weakness of dollar against euro overseas. Though the rupee pared some of its gains as the local markets turned choppy in the second half and on the same time the  Australian central bank decided to keep the interest rates unchanged that made the US dollar stronger against other major currencies. Finally the rupee closed at 46.21/22, 16 paise stronger compared to its Monday's close of 46.37/38.

The FII on Tuesday were the net sellers in both equity as well as debt segments. In equity segment the gross buying was of Rs 2345.50 crore against gross sell of Rs 2394.30 crore, while in the debt segment the gross purchase was of Rs 453.80 crore with gross sales of Rs 815.10 crore.

The US markets closed higher once again on Tuesday and the Dow went for the consecutive triple digit rally. The slew of good economic news is putting the confidence back in the market. The Asian markets have made a good start barring the Chinese market which is trading lower by more than 1%. The domestic markets despite a good start could not maintain their momentum and declined in previous trade to close notably lower. The markets are once again likely to get a good start though the buzz today will be from the primary markets as the power major NTPC FPO opens today and the Infinite Computers is going to be listed on the bourses.

Support and Resistance: S&P CNX Nifty and BSE Sensex

                                                          Nifty Top volumes

• Suzlon Energy's unit, REpower System AG, has received a contract from Germany based-RWE Innogy to deliver 48 wind turbine farm projects.
• Hindalco Industries is planning to produce beverages cans from its plant at Hirakud in Orissa.
• Siemens is going to invest Rs 1,600 crore in India over the next three years for venturing into wind turbine manufacturing and scaling up existing production capacity.
• Bajaj Auto has recorded 101% rise in sales of its two- and three-wheelers in January, to 2.66 lakh units against 1.32 lakh units a year ago.
• ACC's cement despatches for the month of January 2010 increased by 1.05% to 1.91 million tonne from 1.89 million tonne in January 2009.