Indian equity benchmarks ended in the red for a fifth straight session on Monday, with Realty and Metal stocks dragging the most, as investor worries ballooned over possibilities of a quicker rate hike from the U.S. Federal Reserve. The benchmark indices started trade on a lower note, as continued selling by foreign institutional investors (FIIs) weighted on domestic markets. As per provisional data available on the NSE, FIIs net sold shares worth Rs 3,148.58 crore. Some cautiousness came in as former RBI Governor Raghuram Rajan said the Indian economy has some bright spots and a number of very dark stains and the government should target its spending carefully so that there are no huge deficits. Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic. Sentiments remained down-beat with the Ministry of Statistics and Programme Implementation in its latest report has said that as many as 445 infrastructure projects, each entailing investment of Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.4 lakh crore. It said reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages. Key indices continued to reel under the selling pressure in second half of trading session, as nervousness ahead of the upcoming Budget announcements were weighing on the investment sentiment. Traders also got cautious, with a survey done by a consultancy firm has revealed that India Inc is staring at an ''integrity crisis'' in the second year of the pandemic. Traders overlooked the Services Export Promotion Council's (SEPC) statement that it looks to set an export target of $300 billion for 2022-23 as it expects resumption of regular international travels and other business activities in the coming time. Market participants also paid no heed towards the commerce and industry minister Piyush Goyal's statement that a year 2022 will be the breakthrough year which will unlock the country's exponential value. He noted that services export has reached more than $178 billion in April-December 2021 despite the Covid-19 pandemic when the Travel, Hospitality & Tourism sectors were significantly down. Finally, the BSE Sensex fell 1545.67 points or 2.62% to 57,491.51 and the CNX Nifty was down by 468.05 points or 2.66% to 17,149.10.

The US markets ended in green on Monday, after early sell-off, as traders went bargain hunting following recent weakness on markets. However, concerns about tightening monetary policy continued to weigh on the markets early in the session ahead of this week's Federal Reserve meeting. The Fed is scheduled to begin a two-day meeting on Tuesday, with the latest monetary policy decision due Wednesday. While the Fed is likely to leave interest rates unchanged, the accompanying statement could hint at the first rate hike as early as the next meeting in mid-March. Along with the Fed announcement, reports on consumer confidence, new home sales, durable goods orders and personal income and spending may attract attention in the coming days. On the sectoral front, housing stocks moved sharply higher over the course of the trading session, driving the Philadelphia Housing Sector Index up by 3.1 percent. The index rebounded strongly after hitting its lowest intraday level in three months. Significant strength also emerged among oil service stocks, as reflected by the 2.3 percent jump by the Philadelphia Oil Service Index. The turnaround by the sector came even though the price of crude oil for March delivery tumbled $1.83 to $83.31 a barrel. Retail, biotechnology and telecom stocks also showed notable moves to the upside as the day progressed, while weakness remained visible among pharmaceutical and utilities stocks.

Crude oil futures ended lower on Monday amid rising fears the Federal Reserve might resort to aggressive monetary tightening. The Fed's two-day monetary policy meeting is scheduled to take place on Tuesday and Wednesday. The central bank is expected to hold rates unchanged on Wednesday, but the accompanying statement could hint at the first rate hike as early as the next meeting in mid-March. A firm dollar weighed on oil prices. The dollar climbed to a two-week high amid rising tensions between Russia and the West over Ukraine and on prospects about a hawkish stance from the Federal Reserve. Benchmark crude oil futures for March delivery fell $1.83 or 2.2 percent to settle at $83.31 a barrel on the New York Mercantile Exchange. Brent crude for March delivery dropped $1.62 or 1.8 percent to settle at $86.27 a barrel on London's Intercontinental Exchange.

Snapping previous session gaining streak, Indian rupee depreciated against dollar on Monday amid muted domestic equities and elevated crude oil prices weighed on investors mood. Sentiments were downbeat as former RBI Governor Raghuram Rajan said the Indian economy has some bright spots and a number of very dark stains and the government should target its spending carefully so that there are no huge deficits. Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic. On the global front, pound touched a two-week low versus the dollar in early London trading on Monday, hurt by investor caution brought on by falling stocks and tensions between Russia and the West. Finally, the rupee ended 74.62 (Provisional), weaker by 19 paise from its previous close of 74.43 on Friday.

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 7557.51 crore against gross selling of Rs 10632.53 crore, while in the debt segment, the gross purchase was of Rs 1236.02 crore with gross sales of Rs 1288.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.83 crore against gross selling of Rs 9.11 crore.

The US markets ended higher on Monday with bargain hunters pushing the indexes into positive territory by closing bell. Asian markets are trading in red on Tuesday amid nervousness among investors about the situation in Ukraine and ahead of the outcome of the Fed's scheduled policy review. Indian markets suffered their biggest single-day percentage fall since November 26 on Monday, extending losses to the fifth straight session. Today, markets are likely to start session on a negative note, amid weakness across other Asian markets. Heavy selling by foreign institutional investors (FIIs) is likely to weight on the markets. Traders will be concerned as in the adverse case, ICRA projects fiscal deficit at a higher Rs 17.9 trillion, driven by the two major outlays intended to bolster confidence amongst households, namely free food grains under the PMGKAY scheme and an enhanced outgo for MGNREGA. However, some respite may come later in the day as the commerce ministry said exports of engineering goods rose 54 per cent to $81.8 billion during April-December 2021-22 as compared to the same period of the previous year. In the corresponding nine-month period of 2020-21, exports stood at $52.9 billion. The sector accounted for over 27 per cent in India's total exports basket during the period. Some support may also come as Fitch Ratings said India's fuel demand will continue to recover through the current quarter as the easing of Covid-19 pandemic-related restrictions boosts economic activity. Traders may take note of a private report that digital infrastructure sector needs investment of up to $23 billion by 2025, to support the growing demand of digital services and rising online traffic. Meanwhile, the Reserve Bank of India conducted an overnight variable rate repo auction under liquidity adjustment facility (LAF) Monday for an amount of Rs 75,000 crore. The date of reversal is on January 25, 2022. Agriculture industry related stocks will be in focus as the Union Food Ministry said the Centre has procured 606.19 lakh tonne of paddy in the ongoing 2021-22 marketing season so far, with maximum quantities being purchased from Punjab. There will be some reaction in textile industry stocks as Icra ratings in its report stated that Indian cotton spinners are likely to report double-digit revenue growth and all-time high profits in 2021-22, mainly driven by high demand and realisations. It added while the growth is primarily being led by all-time high realisations, which have sustained for much of the year, volumes are also estimated to be better than the pre-COVID levels.

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

Nifty Top volumes

• ICICI Bank has reported 18.89% rise in its consolidated net profit at Rs 6,536.55 crore for Q3FY22 as compared to Rs 5,498.15 crore for Q3FY21. 
• Reliance Industries' telecom arm -- Jio Infocomm has completed 5G network coverage planning for top 1,000 cities in the country. 
• HDFC's wholly-owned subsidiary -- HDFC Capital has achieved the initial close of its third fund of $1.88 billion (about Rs 13,500 crore) focused on affordable housing. 
• TCS is aiming for a high double-digit growth in revenues from Canada in the next few years.