Profit-booking, coupled with doubts over the central government's ability to push through key economic legislations during the upcoming parliament session, dragged the Indian equity markets lower and deposed over one and half percentage point on Tuesday. Sentiments remained subdued with the report that India's merchandise exports fell for the 14th consecutive month with shipments in January, 2016 contracting 13.6 percent year-on-year to $21 billion due to a steep fall in shipment of petroleum products and engineering goods amid tepid global demand. Imports also fell during the month by 11 per cent to $28.7 billion that resulted in the trade deficit narrowing to an 11-month low of $7.6 billion. Besides, a weakness in rupee against the dollar also influenced the sentiment. Indian rupee was trading lower by 33 paise at 68.39 against the American currency at the time of equity markets closing as the dollar firmed up overseas. Market participants remained concerned with the report that foreign Institutional Investors (FIIs) continued their selling spree as they sold net Rs 1,311.59 crore on February 15, 2015. FIIs have been net sellers of Indian equities in 27 of 30 sessions this year, and have offloaded $2.14 billion worth of shares since the beginning of the year until Friday. On the global front, Asian markets ended mostly in green on Tuesday, European stocks too rose in early deals. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices dropped into the red terrain soon, lacking any significant upside cues. The key gauges traded on a lackluster note for most part of the morning trades. The selling pressure accentuated in the mid afternoon as investors took to across the board risk aversion. The indices barely managed to show signs of stabilizing in the second half of the session as the downward drift halted only with the session's close after suffering gargantuan losses. Finally, the BSE Sensex declined by 362.15 points or 1.54% to 23191.97, while the CNX Nifty dropped 114.70 points or 1.60% to 7,048.25.

The US markets closed higher on Friday, despite drop in oil prices. Crude had traded higher earlier on hopes that major oil producers would agree to freeze output, which had pushed stocks to their opening highs. But the production freeze didn't go as far as an outright output cut. On the economy front, business conditions in the New York region remained in deep negative territory. The Empire State manufacturing index for February only inched up to negative 16.6 from negative 19.4 in January. This is the seventh straight monthly contraction in the index, a first reading of manufacturing conditions in the month. The National Association of Home Builders stated that sentiment among home builders dipped in February. The NAHB/Wells Fargo housing market index fell 3 points to 58, from an upwardly-revised 61 in January. The Dow Jones Industrial Average added 222.57 points or 1.39 percent to 16,196.41, the Nasdaq was up 98.45 points or 2.27 percent to 4,435.96 while, the S&P 500 gained by 30.80 points or 1.65 percent to 1,895.58.  

Crude oil futures pared some of their gains gathered in previous session on Tuesday despite a deal between major producers to freeze output. There was skepticism that a Saudi Arabian-Russian brokered deal aimed at freezing production at its current levels could be completed without the cooperation of Iran. Earlier, Saudi Arabia, Russia, Qatar and Venezuela agreed to keep output unchanged from January if Iran and Iraq agree to do the same. Benchmark crude oil futures for March delivery declined by $0.41 or 1.38 percent to $29.04 a barrel after trading in a range of $28.71 and $31.45 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $32.76, down $1.25 or 3.73 percent on the ICE.

Snapping its two-days gaining streak Indian rupee depreciated against dollar on Tuesday due to demand for dollar from banks and importers. Besides, weak trade in the equity market also hit the sentiment. Further, dollar's gains against other currencies overseas and losses in Asian currencies markets also pressurized the domestic unit. Sentiments remain subdued with exports falling for the 14th consecutive month with shipments in January, 2016 contracting 13.6 per cent year-on-year to $21 billion due to weak overseas demand as well as fall in major export items. On the global front, yen grip weakened against other major currencies as the investors took the decision of selling the haven Japanese currency due to risk sentiment. Finally, the rupee ended at 68.38, 32 paise weaker from its previous close of 68.06 on Monday.

The FIIs as per Tuesday's data were net sellers in equity and in debt segments both. In equity segment, the gross buying was of Rs 3667.96 crore against gross selling of Rs 4791.01 crore, while in the debt segment, the gross purchase was of Rs 583.35 crore with gross sales of Rs 1110.17 crore.        

The US markets ended higher in last session, coming after a long weekend and the major averages further offset the steep drop seen throughout much of last week. Although the economic reports were weak but traders mainly went for bargain hunting. The Asian markets have made mostly a positive start, though there is some cautiousness in the region too after China weakened the yuan's daily fixing by the most in more than a month. The Indian markets after showing a range bound trend, lost the momentum completely in the final hours and plunged by over one and half a percent in last session. Today the start is likely to be in green tailing the gains in the other global markets but the trade is likely to remain choppy lacking any major supportive cues. Traders will be concerned with exporters' body FIEO's observation after exports fell for the 14th month in a row, that the country may end up with outbound shipments of $260 billion in 2015-16, sharply lower than the $ 310.5 billion mark achieved in the previous fiscal. Traders may get some support with Union Commerce and Industry Minister Nirmala Sitharaman's statement that that the FDI inflows in the country are improving day by day and more and more investments are coming from sectors other than IT and ITeS. The PSU banking stocks again will be in focus as the Standard & Poor's Ratings Services has said that Capital requirements of PSU banks for provisioning of bad loans are likely to shoot up exposing them to possible downgrades. It said that PSU lenders are in a weaker position on the capitalisation front than their private sector peers and may find it difficult to raise capital given their weak performance.

Support and Resistance: NSE Nifty and BSE Sensex

Nifty Top volumes

• Tata Power has successfully operationalised the net metering for the Rooftop Solar PV System installed at the premises of Vardhan Industries, a Tata Power consumer, in Mumbai.
• HCL has signed a significant IT outsourcing deal with the Volvo Group, one of the world's leading manufacturers of commercial vehicles and the customers of its external IT business.
• Yes Bank has signed a Memorandum of Understanding with the Indian Renewable Energy Development Agency to foster development of the Renewable Energy Sector in India.
• Vedanta has signed an agreement with the Odisha government to set up an aluminium park across 240 acres of land, adjacent to its aluminium smelter at Jhasarguda.
• Idea Cellular is all set to launch its 4G service in Maharashtra, Goa and North East by next month.