Tuesday's session turned out to be a nasty one for the Indian equity benchmarks which tumbled like a ‘house of cards' and went on to breach various key technical levels in the over a percent freefall. Sentiments turned pessimistic after the Reserve Bank of India (RBI) kept its key policy rates unchanged, opting to wait for the government's annual budget statement at the end of February for further easing. Sentiments weakened further with Moody's Investors Service's report that RBI's target to bring down retail inflation at 5 per cent by March 2017 will face some risks from monsoon uncertainty and execution of seventh Pay Panel recommendations, while macro-economic factors will be critical for sustaining growth. Market participants remained worried that the union budget might increase effective corporate tax rate by doing away with a host of tax exemptions. Depreciation in Indian rupee too weighed down sentiments. The rupee depreciated by 12 paise to trade at 67.96 against the US dollar at the time of equity markets closing. Investors failed to draw any solace from report that Core sector output returning to positive territory in December 2015 by registering a 0.9 per cent growth after shrinking (-) 1.3 per cent in November last year. On the global front, Asian equity markets ended mostly in red, while European equities too fell sharply in early trade as crude oil prices slipped again. Back home, after getting positive start, Indian benchmark indices showed signs of consolidation in early trade and entered into negative territory in noon session. But, the sentiments got spooked in late afternoon trades following the sell-off in European markets. Thereafter, the frontline indices lost the plot and kept tumbling down the hill without any stoppage. The sharp cut dragged key indices to intraday lows of around 24,450 and 7,430 levels post which some short covering helped the indices to settle off the day's lows. Finally, the BSE Sensex declined by 285.83 points or 1.15% to 24539.00, while the CNX Nifty lost 100.40 points or 1.33% to 7,455.55.

The US markets closed sharply lower on Tuesday, as investors' unloaded energy and financial stocks amid a selloff in crude-oil futures, which settled below $30 a barrel. A fresh slump in oil prices following a slide on Monday, weighed on energy companies' stocks. On the economy front, sales of new vehicles dropped in the United States in January from a year ago, partly because of the snowstorm that shut down dealerships across the East Coast. Over all, the industry reported selling about 1.15 million vehicles during the month, a decline of 0.3 percent from January 2015. That was better than expected, particularly because January had two fewer selling days than last year because of a quirk in the calendar. The major auto manufacturers reported mixed results as demand continued to tilt more toward sport utility vehicles and pickups and away from traditional passenger cars. The Dow Jones Industrial Average lost 295.64 points or 1.80 percent to 16,153.54, the Nasdaq was down 103.42 points or 2.24 percent to 4,516.95 while the S&P 500 dropped by 36.35 points or 1.87 percent to 1,903.03. 

Crude oil futures plunged on Tuesday and tumbled below $30 a barrel, amid renewed speculation that global oil inventories will continue to mount. Further, there were reports that Iran could pencil in a line item on its annual budget, which would enable the Persian Gulf state to ramp up its oil exports above the 2 million barrel threshold in fiscal year 2016. Also, there were reports that Iran is planning to export as much as 2.3 million barrels per day of crude this year, commencing as early as next month. Benchmark crude oil futures for March delivery declined by $1.68 or 2.30 percent to $29.97 a barrel after trading in a range of $29.82 and $31.52 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $32.76, down $1.47 or 4.31 percent on the ICE.

Indian rupee extending its weakness for the second straight day depreciated against dollar on Tuesday after the Central Bank in its monetary policy review opted to keep the policy repo rate unchanged on inflation concerns even as it emphasized that it continues to be accommodative. It has also left the cash reserve ratio of scheduled banks unchanged at 4.0 per cent. The reverse repo rate under the LAF will remain unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 7.75 per cent. Besides, demand for American currency from importers and losses in equity market also kept the rupee environment pessimistic. Investors failed to get relief with Core sector output returning to positive territory in December 2015 by registering a 0.9 per cent growth after shrinking (-)1.3 per cent in November last year. On the global front, yen rose on Tuesday as a fall in oil prices and Asian stock markets sent investors in search of traditional safe havens for capital. Finally, the rupee ended at 67.98, 14 paise weaker from its previous close of 67.84 on Monday.

The FIIs as per Tuesday's data were net buyers in equity and in debt segments both. In equity segment, the gross buying was of Rs 4281.44 crore against gross selling of Rs 3876.76 crore, while in the debt segment, the gross purchase was of Rs 2255.26 crore with gross sales of Rs 640.15 crore.     

The US markets suffered sharp sell-off in the last session amid a notable decrease by the price of crude oil. Though, the trading activity too remained light, as some traders were on the sidelines lacking any major US economic news. The Asian markets have made a weak start, as oil slumped below $30 a barrel eroding investor confidence in global economic growth. The loss in the region is led by the Japanese market which is down by over three percent as yen surged on demand for safer haven. The Indian markets completely lost its momentum in the final hours and major averages lost over a percent, tailing the weakness in other markets and disappointed by RBI's status quo stance in its monetary policy. Today, the start is likely to be weak and the markets will extend their somberness for yet another day amid feeble global cues. While there will still be lingering disillusionment of RBI's policy stance, the commodity stocks will be under pressure taking cues from their global counterparts. However, there will be some solace with the Reserve Bank keeping its growth projections for Indian economy unchanged at 7.4 percent for the current fiscal, a tad higher than 7.3 percent forecast by the World Bank. Traders will also be eyeing the Services PMI data, meanwhile IBM chairman & CEO Virginia Rometty has said that the 21st century will belong to India. She said India would be at the centre of the fourth technology shift that she refers to as the cognitive era. The export oriented stocks will be in action, as the Commerce Ministry has asked exporters to come up with specific suggestions which could be taken up with various ministries, including Finance, to improve ease of doing business and boost waning exports. There will be lots of result announcements too, to keep the markets buzzing.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Sun Pharma and its subsidiaries have launched Imatinib Mesylate Tablets in US market. Sun Pharma's subsidiary received final approval for Imatinib Mesylate from FDA in December 2015.
• Tata Motors continued to witness year-on-year growth in the M&HCV segment in January 2016, with a growth of 30%.
• Bajaj Auto, the second-largest motorcycle manufacturer has registered rise of 2% in total sales to 2,93,939 units in January 2016 against 2,88,746 units in January 2015.
• Coal India, the world's largest coal miner by output, has reported provisional production of 52.86 million tonnes in January 2016, as against target of 56.18 million tonnes.
• Lupin's US arm, Lupin Pharmaceuticals Inc. has launched its Metformin HCI ER Tablets, 500 mg and 1000 mg to market a generic equivalent of Santarus Inc.'s Glumetza HCI ER Tablets, 500 mg and 1000 mg.