Extending their losing streak for third straight session, Indian equity benchmarks ended the Monday's trade with a cut of around a percentage point. Markets started the day on positive note as traders took encouragement with former deputy chairman of Planning Commission Montek Singh Ahluwalia's statement that the country's economy, which contracted in the first two quarters of the current fiscal, has started recovering at a gradual pace. Some support also came after the UN has said that foreign Direct Investment into India rose by 13 per cent in 2020, boosted by interest in the digital sector, and while fund flows declined most strongly in major economies such as the UK, the US and Russia due to the COVID-19 pandemic, India and China bucked the trend. An investment trends monitor issued by the United Nations Conference on Trade and Development (UNCTAD) on Sunday said that global foreign direct investment (FDI) collapsed in 2020 by 42 per cent to an estimated $859 billion from $1.5 trillion in 2019. But soon, markets turned volatile as traders got worried with the RBI data showing that the country's foreign exchange reserves declined by $1.839 billion to $584.242 billion in the week ended January 15. Market participants couldn't managed to hold their nerves and started selling risky assets amid reports that Indian and Chinese troops came face-to-face at Naku La in North Sikkim last week amid the tense border standoff between the two sides in eastern Ladakh. They said the Chinese troops attempted to transgress into the Indian side of the Line of Actual Control (LAC) but were stopped by the Indian military personnel. It is learnt that a brawl broke out when the Indian troops stopped the Chinese soldiers. Traders failed to get any sense of relief with WEF report that investment in upskilling has potential to boost the global GDP by $6.5 trillion by 2030, including by $570 billion (over Rs 40 lakh crore) in India alone - the third highest after China and the US. Finally, the BSE Sensex fell 530.95 points or 1.09% to 48,347.59, while the CNX Nifty was down by 133.00 points or 0.93% to 14,238.90.

The US markets ended marginally lower on Tuesday. The choppy trading on markets partly reflected uncertainty about the near-term outlook for the markets after the Nasdaq and the S&P 500 climbed to new record closing highs on Monday. Traders have largely shrugged off a report from the Conference Board showing an unexpected improvement in US consumer sentiment in the month of January. The Conference Board said its consumer confidence index climbed to 89.3 in January from a downwardly revised 87.1 in December. The increase surprised participants, who had expected the index to edge down to 88.5 from the 88.6 originally reported for the previous month.However, optimism about additional stimulus under President Joe Biden has helped drive stocks higher in recent sessions, although reports have pointed to intensifying opposition from GOP lawmakers. The Biden administration has signaled a willingness to negotiate over the president's $1.9 trillion proposal, but it is worth noting that talks over the previous relief package dragged on for months. Traders may also have been reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday. The Fed is widely expected to leave interest rates unchanged, but many expect the central bank to provide additional guidance about its bond purchasing program.

Crude oil futures ended lower on Tuesday as traders looked ahead to weekly inventory data, and appeared a bit hesitant to create significant long positions due to uncertain outlook for energy demand. The American Petroleum Institute's weekly oil report is due later today, while the Energy Information Administration (EIA) is scheduled to release its inventory data for the week ended January 22 on Wednesday. However, oil's decline was somewhat limited as prices found some support on reports about a blast in Saudi Arabia. Crude oil futures for March fell $0.16 or 0.3 percent to settle at $52.61 barrel on the New York Mercantile Exchange. March Brent crude lost $0.10 or 0.2 percent to settle at $55.78 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally higher against dollar on Monday as banks and exporters continued to sell the US currency amid persistent capital inflows. Some support came with former deputy chairman of Planning Commission Montek Singh Ahluwalia's statement that the country's economy, which contracted in the first two quarters of the current fiscal, has started recovering at a gradual pace. However, upside remain capped with report that Indian and Chinese troops came face-to-face at Naku La in North Sikkim last week amid the tense border standoff between the two sides in eastern Ladakh. Meanwhile, foreign portfolio investors (FPI) remained net buyers to the tune of Rs 18,456 crore so far in January as global liquidity led to continued investment in emerging markets. On the global front; rebound in global market sentiment put new momentum behind the dollar decline on Monday, while riskier currencies strengthened, as optimism about US President Joe Biden's stimulus plans took precedence over the impact of COVID-19. Finally, the rupee ended at 72.94, 3 paise stronger from its previous close of 72.97 on Friday.

The FIIs as per Monday's data were net seller in equity segment, while net buyer in debt segment. In equity segment, the gross buying was of Rs 8362.61 crore against gross selling of Rs 9201.80 crore, while in the debt segment, the gross purchase was of Rs 2084.69 crore with gross sales of Rs 338.50 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.78 crore against gross selling of Rs 14.08 crore.

The US markets settled lower on Tuesday as investors digested a batch of corporate earnings results, while an expected policy announcement from the Federal Reserve on Wednesday helped to limit moves. Asian markets are trading mostly in green on Wednesday as the International Monetary Fund (IMF) raised its growth forecast for the global economy this year. Indian markets ended lower on Monday with cut of around a percent each dragged by losses in IT, auto and FMCG sectors. Markets were closed on Tuesday for Republic Day. Today, the markets are likely to make optimistic start tracking gains in Asian peers. Traders will be taking encouragement as the IMF projected an impressive 11.5 per cent growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth this year amidst the coronavirus pandemic. Some support will also come as the latest round of FICCI's Economic Outlook Survey showed that India's gross domestic product (GDP) is expected to contract by 8 per cent in 2020-21. However, there may be some cautiousness as India recorded 12,569 fresh cases of the coronavirus disease (Covid-19). The caseload tally stands at 10,690,279. Globally, more than 100 million people have been infected by the virus. The country continues to be second-most-affected globally, and ranks 14th among worst-hit nations by active cases. Besides, overseas investment by domestic firms fell by over 42 per cent to $1.45 billion in December 2020, according to Reserve Bank data. In the year-ago period, companies in India had invested $2.51 billion in their foreign firms (joint ventures / wholly-owned units). Agriculture stocks will be in focus with a report that the government is likely to raise farm credit target to about Rs 19 lakh crore in Budget 2021-22 to be presented on February 1, with the aim of doubling farmers' income by 2022. There will be some reaction in infrastructure stocks with report that as many as 450 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.28 trillion. Meanwhile, Blackstone-backed Aadhar Housing Finance has filed preliminary papers with markets regulator Sebi to raise Rs 7,300 crore through an initial public offering. There will be lots of earnings reaction to keep the markets buzzing.

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

Nifty Top volumes

• Reliance Industries has completed spin-off of the firm's oil-to-chemical business into a new unit that will help it pursue growth opportunities with strategic partnerships. 
• Tata Motors has launched the i-Turbo petrol variant of its premium hatchback Altroz at an introductory price increment of Rs 60,000 above the existing petrol variants of the model. 
• Infosys and TCS have joined global giants like Microsoft, Facebook, Google and Bank of America in an international coalition launched by the World Economic Forum to tackle racism in workplaces. 
• BPCL is expecting to expand its customer base 10-fold to one million under a new customer loyalty campaign.