Key benchmark equity indices plunged over 1% and ended near their day's low on Tuesday as weak global cues and strength in the dollar against other major currencies fuelled concerns among investors. Markets kicked off trade on a strong note tracking higher advance tax payments for the December quarter from most of the heavyweights but weakness in the key Asian markets triggered profit booking in late morning trades which continued to intensify as the day progressed. This led to the BSE Sensex and the S&P CNX Nifty shutting shop below the psychological levels of 17,000 and 5050, respectively. Banking sector stocks took it on the chin from the bears in trade. HDFC Bank, SBI and ICICI Bank were the biggest losers from this space. Auto, public sector undertaking and oil & gas counters were the other major laggards in trade while healthcare counter showed some resilience in trade. Situation was even worse on the broader indices which shed around one and a half percent. The initial public offer (IPO) of DB Corp has received good response from investors and was subscribed 39.47 times. Finally, the 30-share BSE Sensex plummeted 220.39 points or 1.29% to close at 16,877.16, while the 50-share S&P CNX Nifty tumbled 72.65 points or 1.42% to end at 5033.05.

The US markets declined on Tuesday on the worries of inflation, all the major indices declined by about half a percent. The government reported that the wholesale prices jumped 1.8% last month. Core inflation that excludes often-volatile food and energy costs rose 0.5%, the biggest increase in more than a year. Though, industrial production rose 0.8% in November, the biggest gain since August. The Dow Jones Industrial Average lost 49.05 points, or 0.47%, to 10,452.00. The S&P 500 index declined by 6.18 points, or 0.55%, to 1,107.93, and the Nasdaq composite index closed lower by 11.05 points, or 0.50%, to 2,201.05.

Crude prices bounced back on Tuesday after declining for nine days in a row with OPEC predicting energy demand to rebound faster than it had previously thought. The 12-nation group, which supplies about 35% of the world's crude said, it expected the world would consume 70,000 barrels more crude next year than previous estimates. Benchmark crude for January delivery added $1.18 to settle at $70.69 a barrel on the New York Mercantile Exchange. In London, Brent crude for January delivery rose 16 cents to settle at $72.05 a barrel on the ICE Futures exchange.

The Indian rupee closed flat on Tuesday, the rupee received a good start, tracking the weakness in dollar's against other major currencies and was well supported by a higher start of the domestic sharemarket but the choppiness in the local equities in second half pulled the currency down, expectations of monetary action by the central bank in the near future also weighed on the rupee. Finally the rupees closed at 46.72, just 2 paise weaker compared to its Monday's close of 46.70/71.

The FII on Tuesday were the net buyers in the equity segment with gross buying of Rs 1830.10 crore against gross sell of Rs 1655.60 crore, while in the debt segment they were the net sellers with a gross purchase of Rs 295.80 crore against gross sales of Rs 500.90 crore.

The US markets declined on Tuesday on inflation worries, the nation reported its highest inflation in last one year, though industrial production too increased by about a percent but the trade remained subdued due to the Fed's ongoing meeting on interest rates. The Asian markets have made a mixed start with some of the indices trading in red while others are flat. The domestic markets declined in the second half, the advance tax figures hog the limelight and even today scrip specific movement can be seen as per the advance tax payment. The Indian merchandise exports rose in November for the first time in the fiscal, moving up by 18.28%.Export oriented companies might get the advantage of the news. In scrip specific movement Orchid is likely to be in limelight as it has agreed to sell its injectables business to the US-based Hospira.

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

                                                          Nifty Top volumes

• Hindalco Industries has paid Rs 100 crore advance tax for the third quarter as against Rs 40 crore in the same period last year.
• RCOM may invite strategic investors to buy some part of its Flag undersea cable network.
• SAIL is looking to hike rates of steel products next month following a recovery in demand.
• DTC has slapped a fine of Rs 4 crore on Tata Motors for the recent bus mishaps; 45 days have been given to the company to thoroughly check all the buses in service.
• Bajaj Auto has launched Pulsar 135 LS, which marks the company's foray into entry-level bike segment.