Indian equity benchmarks reversed 5-day winning trend and settled deep in the red on Tuesday, mirroring weak global markets. Losses in Metal, Oil & Gas, Energy and IT shares pulled the headline indices lower. After making positive start, key indices gave up gains and traded lower for the day, as traders turned cautious with data released by the Ministry of Statistics and Programme Implementation showed that India's retail inflation in February rate rose to an eight-month high of 6.07 percent from 6.01 percent in the previous month, remaining above the upper limit of the central bank's comfort level of 6 per cent for the second consecutive month. Traders were concerned as SBI forecast more pain for the rupee if the ongoing Ukraine war lingers, plumbing to a new low of 77.5 to a dollar by June and marginally improving to 77 by end-December. It also said the current account deficit (CAD) will be at 3.5 per cent if crude oil trades at $130 a barrel, pulling down growth to 7.1 per cent. Markets extended losses in second half of trading session, as investor sentiments got a hit with report by the Ministry of Statistics and Programme Implementation showing that India's urban unemployment rate jumped to 12.6 percent in April-June 2021 from 9.3 percent in the previous quarter. Besides, foreign institutional investors (FIIs) continue selling in India as they have net sold shares worth Rs 176.52 crore on March 14, the lowest offloading in a single day in the last one month. Traders overlooked rating agency ICRA Ratings' report that the asset under management (AUM) of non-banking financial companies (retail) is expected to grow 5-7 per cent in fiscal 2022 and 8-10 per cent in fiscal 2023. It said housing finance companies (HFCs) are likely to see their AUM expanding by 8-10 per cent in the current fiscal and 9-11 per cent in the next financial year. Market participants also paid no heed towards industry body Retailers Association of India (RAI) stating that retail business in India grew 10 percent in February this year compared to the sales level in the same month last year, signaling that the sector is inching towards normalcy. Finally, the BSE Sensex fell 709.17 points or 1.26% to 55,776.85 and the CNX Nifty was down by 208.30 points or 1.23% to 16,663.00.

The US markets ended higher on Tuesday as oil prices continued to drop further below $100. Traders also reacted positively to a report from the Labor Department showing producer prices increased by slightly less than expected in the month of February. The Labor Department said its producer price index for final demand climbed by 0.8 percent in February after surging by an upwardly revised 1.2 percent in January. Street had expected producer prices to advance by 0.9 percent compared to the 1.0 percent jump originally reported for the previous month. Excluding prices for food, energy and trade services, core producer prices edged up by 0.2 percent in February following a 0.8 percent increase in January. Meanwhile, traders continued to eye the latest with ceasefire negotiations in Ukraine and China Covid lockdowns that could wreak havoc on tech supply chains. Investors were anticipating a big Federal Reserve monetary decision on Wednesday, in which the central bank is expected to hike rates for the first time since 2018. On the sectoral front, airline stocks turned in some of the market's best performances on the day, with the NYSE Arca Airline Index soaring by 5.6 percent. Significant strength was also visible among semiconductor stocks, which regained ground after falling sharply during trading on Monday.

Crude oil future ended deeply lower on Tuesday, extending their previous session's losses, amid fresh concerns over demand from China, where there has been a surge in Covid-19 cases, and on easing worries about supply disruptions. Expectations of positive developments in the Russia-Ukraine ceasefire talks eased fears of further supply disruptions and weighed on oil prices. Meanwhile, traders also looked ahead to the Federal Reserve's monetary policy announcement on Wednesday. The Fed is widely expected to hike rates by 25 basis points. The focus will be on the central bank's accompanying statement, which is expected to provide clues about future rate hikes. Benchmark crude oil futures for April delivery fell $6.57 or 6.4 percent to settle at $96.44 a barrel on the New York Mercantile Exchange. Brent crude for May delivery dropped $6.99 or 6.5 percent to settle at $99.91 a barrel on London's Intercontinental Exchange.

Surrendering its early gains, rupee ended weaker against dollar on Tuesday on account of continued dollar demand from importers and banks. Besides, heavy selling in domestic equities and continued foreign capital outflows put pressure on the domestic unit. Uncertainty over the conflict in Ukraine and expected rate hike by the US Federal Reserve on Wednesday are kept traders on edge. Sentiments were also dampened as SBI forecast more pain for the rupee if the ongoing Ukraine war lingers, plumbing to a new low of 77.5 to a dollar by June and marginally improving to 77 by end-December. It also said the current account deficit (CAD) will be at 3.5 per cent if crude oil trades at $130 a barrel, pulling down growth to 7.1 per cent. On the global front, euro rose on Tuesday on hopes of progress in peace talks between Ukraine and Russia despite soaring COVID-19 cases in China dampening risk appetite. Finally, the rupee ended at 76.62 (Provisional), weaker by 8 paise from its previous close of 76.54 on Monday.

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 8300.99 crore against gross selling of Rs 7329.11 crore, while in the debt segment, the gross purchase was of Rs 607.51 crore against gross sales of Rs 442.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.09 crore against gross selling of Rs 8.65 crore.

The US markets ended higher on Tuesday led by strong gains in tech, consumer discretionary and healthcare shares. Asian markets are trading in green on Wednesday tracking an overnight rally on Wall Street. Indian markets snapped their five-day winning streak on Tuesday as losses in metal, IT, oil & gas and select financial shares pulled the headline indices lower. Today, the start of session is likely to be gap-up following firm global cues. Some support will come as the Ministry of Finance said the Indian economy is well prepared to handle any capital outflows caused by external shocks. In its Monthly Economic Review report released the finance ministry's Department of Economic Affairs said India has adequate foreign exchange reserves to absorb the risks posed by the uncertain geopolitical environment. Traders may take note of report that the government said it is keeping a close watch on evolving geopolitical developments and would make calibrated interventions to keep fuel prices under control to safeguard the interest of the common man. Meanwhile, Finance Minister Nirmala Sitharaman said that Rs 96,756 crore had been disbursed to states as goods and service tax (GST) compensation, but Rs 53,611 crore was still pending. However, some cautiousness may come as Foreign Institutional Investors (FII) continued their exodus from Dalal Street, pulling out Rs 1,249 crore. There will be some buzz in power stocks with report that India is not facing any power crisis as the installed electricity generation capacity stood at 395.6 gigawatts (GW) against the peak demand of 203 GW recorded in 2021-22. Power Minister R K Singh said there is no power crisis in the country. Sugar industry stocks will be in focus as Abinash Verma, Director General of the Indian Sugar Mills Association said Indian sugar exports are seen climbing to 7.5 million tonnes in the 2021/22 season, up from the prior season's 7.1 million. There will be some reaction in select banking stocks with report that no public sector bank (PSB) has faced any loss in the April-December period of the current fiscal year, and clocked a collective net profit of Rs 48,874 crore during this period. Auto stocks will be in limelight with a private report that major automotive (auto) component manufacturers and automakers were shortlisted by the government for incentives under the production-linked incentive (PLI) scheme for the sector.

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

Nifty Top volumes

• Reliance Industries' wholly owned subsidiary -- Reliance New Energy has inked signed definitive agreements to acquire substantially all of the assets of Lithium Werks BV for a total transaction value of $61 million including funding for future growth. 
• Tech Mahindra has inked pact with Celonis to introduce new solutions to further accelerate digital transformation for Tech Mahindra's customers.
• L&T has bagged orders in India and abroad for the Power Transmission & Distribution Business. 
• TCS has become the Official Solutions Partner for World Wide Fund for Nature Singapore's AR-mazing Tiger Trail, a highly visual and gamified exhibition aimed at driving awareness and action on tiger conservation and sustainability.