Indian equity benchmarks ended lower on Monday due to intense selling pressure in Metal, Utilities and power stocks. Besides, a sharp decline in the rupee against the US dollar also put pressure on domestic equities. Markets made a cautious start and stayed in red throughout the day as traders were concerned as foreign investors pulled out Rs 28,852 crore from Indian equities in January, making it the worst outflow in the last seven months, primarily due to attractiveness of the Chinese markets. Some anxiety also came as the government hiked windfall profit tax levied on domestically-produced crude oil as well as on the export of diesel and ATF, in line with firming international oil prices. The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) has been increased to Rs 5,050 per tonne from Rs 1,900 per tonne.  Key indices continued to show a sluggish trend in late afternoon session as market participants avoided taking any long positions ahead of a three-day policy meeting of the Reserve Bank of India's (RBI's) monetary policy committee. The Indian central bank is likely to raise rates by 25 basis points despite signs of softening retail inflation. Traders overlooked latest data released by the central bank showing that the Reserve Bank of India's foreign exchange reserves rose $3 billion to $576.76 billion in the week ended January 27. The current level of reserves is the highest since the week ended July 8, 2022. Traders took a note of the Reserve Bank's statement that India's banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders, amid concerns over banks' exposure to the embattled Adani Group. Finally, the BSE Sensex fell 334.98 points or 0.55% to 60,506.90 and the CNX Nifty was down by 89.45 points or 0.50% to 17,764.60.

The US markets ended lower on Monday, magnifying their previous session's losses. Concerns about the outlook for interest rates continued to weigh on Wall Street following last week's stronger than expected jobs data. Trading activity was somewhat subdued with a lack of major U.S. economic data keeping some traders on the sidelines. The economic calendar remains relatively light throughout the week, although traders are likely to keep an eye on remarks by Federal Reserve Chair Jerome Powell on Tuesday. Meanwhile, computer hardware stocks saw considerable weakness on the day, resulting in a 2.3 percent slump by the NYSE Arca Computer Hardware Index. Dell Technologies (DELL) posted a steep loss after announcing plans to cut about 6,650 jobs or approximately 5 percent of its global workforce. Significant weakness was also visible among steel stocks, as reflected by the 2.0 percent drop by the NYSE Arca Steel Index. Housing, semiconductor and gold stocks also saw notable weakness, moving lower along with most of the other major sectors.

Crude oil futures ended higher on Monday on optimism energy demand from China will see a significant increase. A report from the International Energy Agency (IEA) said about half of this year's global oil demand growth will come from China. Further, reports about Saudi Arabia unexpectedly increasing the prices of oil that will be shipped to Asia contributed significantly to the positive close of the contract. Besides, oil prices were supported by concerns about supply following a major earthquake in Turkey forcing an oil terminal in Ceyhan to shut down. Benchmark crude oil futures for March delivery rose $0.72 or 1 percent at $74.11 a barrel on the New York Mercantile Exchange. Brent crude for April delivery surged $1.28 or 1.6 percent at $81.22 (Provisional) a barrel on London's Intercontinental Exchange.

Indian rupee ended considerably lower against the US dollar on Monday weighed down by gains in the greenback in the overseas markets and a muted trend in domestic equities. Sustained foreign fund outflows and firm crude oil prices further dented investor sentiments. Traders were concerned as Foreign investors pulled out Rs 28,852 crore from Indian equities in January, making it the worst outflow in the last seven months, primarily due to attractiveness of the Chinese markets. On the global front, dollar held firm against the euro on Monday, with traders taking the view the U.S. Federal Reserve will likely lift its benchmark rate above 5% and keep it there to squeeze inflation after data showed the labour market remains strong.  Finally, the rupee ended at 82.73 (Provisional), weaker by 65 paise from its previous close of 82.08 on Friday.

The FIIs as per Monday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 10,021.85 crore against gross selling of Rs 10,271.76 crore, while in the debt segment, the gross purchase was of Rs 809.68 crore against gross selling of Rs 427.44 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.52 crore against gross selling of Rs 15.02 crore.

The US markets ended lower on Monday as investors grew increasingly cautious of rising bond yields.  Asian markets are mostly trading in green on Tuesday, despite weak cues from US markets overnight, ahead of the US Federal Reserve Jerome Powell's speech later in the day. Indian equity indices ended lower on Monday as traders booked their profits after gains in previous session. Today, markets are likely to make positive start, tracking firm cues from other Asian markets. Traders may get some engagement as India and the European Union (EU) announced the formation of three working groups under the Trade and Technology Council that was set up to deepen strategic ties with the trade bloc. To lay the groundwork, the working group will cover key issues such as strategic technologies, digital governance and connectivity; green and clean energy technologies; and trade, investment and resilient value chains. Meanwhile, RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) started its three-day meeting on Monday amid expectations of a smaller 25 basis points rate increase or a pause on the rate hiking spree that started in May last year to check inflation. The decision of the six-member rate setting panel will be announced by the Governor on Wednesday. Traders may take note of report that Revenue Secretary Sanjay Malhotra said that India will not overhaul its Goods and Services Tax (GST) regime in the next fiscal year, delaying a move it has been considering for more than a year to simplify its tax structure and reduce the burden on consumers. Besides, the government said it is aware of the downside risks to the Indian economy and will closely monitor the current account deficit (CAD) in view of the decline in export growth. There will be some buzz in oil and gas industry stocks as Prime Minister Narendra Modi said that India's share in the global oil demand is expected to increase to 11 per cent, while the gas demand is expected to rise up to 500 per cent. He underlined that new opportunities for investment and collaboration are being created by the expanding energy sector of India. Quoting the International Energy Association, the prime minister remarked that India's energy demands will be highest in the present decade which presents an opportunity for the investors and stakeholders of the energy sector. All eyes would be on December quarter results of three Adani group companies Adani Ports & SEZ, Ambuja Cements and Adani Green Energy Adani Group, which are scheduled for today.

Support and Resistance: NSE (Nifty) and BSE (Sensex)

Nifty Top volumes

• Bharti Airtel has increased its direct stake in Indus Towers by acquiring 23.01 per cent shares held by its completely owned subsidiary Nettle Infrastructure.  
•  Tata Steel has established a Centre for Innovation in Mining and Mineral Beneficiation at the Indian Institute of Technology, Dhanbad.
•  Ashok Leyland and Reliance Industries have unveiled India's first Hydrogen Internal Combustion Engine powered Heavy Duty truck.
•  In line with its commitment towards evolving to electric, Tata Motors is delivering the first batch of 2000 Tiago.evs, marking an electrifying start to the year.