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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.

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.

Back home, 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.

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