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Indian equity benchmarks were highly volatile, oscillating between gains and losses while managing to close on a positive note on Tuesday. Weakness across sectors pulled the headline indices lower, with utilities, power, capital goods and realty stocks being the biggest drags. The indices opened marginally higher before gyrating between gains and losses, as traders got some support with Minister of State for Finance Pankaj Chaudhary’s statement that India's gross domestic product (GDP) is projected to grow at 9.2 per cent to Rs 147.5 lakh crore in 2021-22. Chaudhary said the government has implemented several major reforms in recent years to boost investment and GDP growth. Markets soon slipped into negative terrain, as traders turned cautious with Fitch Ratings’ statement that higher fiscal deficits and lack of clarity on consolidation plans in the Budget add risks to its projection of lowering of India's debt-to-gross domestic product (GDP) ratio. Investors are eyeing the RBI MPC meeting which is slated to begin today.

Key indices were exhibiting high amount of volatility albeit with a negative bias, as traders remained worried after private report stated that E-way bill generation for goods transportation under the goods and services tax (GST) system stood at 6.88 crore in January, down 4% from the previous month, reflecting some slack in trade due to the spread of the Omicron variant of Covid. However, Indian bourses erased initial losses and managed to end in green, as some optimism remained among traders with Union Finance Minister Nirmala Sitharaman’s statement that India will be the fastest-growing economy this year and by the next year, the country will be the fastest-growing economy among the large economies. Meanwhile, Parliament informed that the government has recapitalised public sector banks (PSBs) by infusing over Rs 3.10 lakh crore in the last five fiscals, a majority of which was through issuance of recapitalization bonds.

On the global front, Asian markets ended mostly higher on Tuesday despite the mostly negative cues from Wall Street, as traders shrugged off concerns about inflation and continue to pick up stocks at a bargain after the recent sell-off. Traders looked ahead to the release of the U.S. inflation data and the minutes of the U.S. Fed Reserve's latest monetary policy meeting, for directional cues. European markets were trading higher as investors reacted to the latest earnings updates and awaited U.S. inflation data due this week for clues on the timing of a Federal Reserve interest-rate hike. Back home, on the sectoral front, sugar industry’s stocks were in watch as the All India Sugar Trade Association (AISTA) said Indian mills have signed contracts to export 4.6 million tonnes of sugar in the 2021/22 marketing year without government subsidies. Auto stocks also were in limelight as automobile dealers' body FADA said passenger vehicle retail sales declined 10 per cent year-on-year in January 2022, as the companies continued to suffer production loss amid semiconductor shortage.

Finally, the BSE Sensex rose 187.39 points or 0.33% to 57,808.58 and the CNX Nifty was up by 53.15 points or 0.31% to 17,266.75.  

The BSE Sensex touched high and low of 57,925.82 and 57,058.77, respectively. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.45%, while Small cap index was down by 1.40%.

The top gaining sectoral indices on the BSE were Metal up by 1.06%, Energy up by 0.94%, Bankex up by 0.16%, Auto up by 0.15% and Telecom up by 0.13%, while Utilities down by 2.82%, Power down by 2.80%, Capital Goods down by 1.07%, Realty down by 0.84% and Industrials down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.10%, Bajaj Finance up by 1.74%, Bajaj Finserv up by 1.69%, Reliance Industries up by 1.64% and Titan Company up by 1.38%. On the flip side, Power Grid Corporation down by 1.66%, TCS down by 0.96%, Ultratech Cement down by 0.65%, Tech Mahindra down by 0.62% and Kotak Mahindra Bank down by 0.60% were the top losers.

Meanwhile, Minister of State for Finance Bhagwat Karad has said that the banks' gross non-performing assets (GNPAs) have declined to Rs 8,00,463 crore (6.93 per cent) as of September 30, 2021 from Rs 9,33,779 crore (GNPA ratio of 9.07 per cent) as on March 31, 2019. Of this, the share of public sector banks (PSBs) in bad loans proportion has also declined 72 per cent against nearly 80 per cent.

The minister said GNPAs of public sector banks as a proportion to that of scheduled commercial banks (SCBs) have decreased from 79.2 per cent as on March 31, 2019, to 72.3 per cent as on September 9, 2021. However, he said gross NPAs of private sector banks as a proportion of that of SCBs have increased from 19.4 per cent to 24.9 per cent during this period.

Karad also stated that Gross NPAs of deposit-taking NBFCs and non-deposit taking systemically important NBFCs stood at Rs 1,91,413 crore (GNPA ratio of 6.87 per cent) at the end of September 2021.

The CNX Nifty traded in a range of 17,306.45 and 17,043.65 and there was 28 stocks advancing against 22 stocks declining on the index.  

The top gainers on Nifty were Tata Steel up by 3.09%, Cipla down by 1.81%, Reliance Industries up by 1.74%, Divi's Lab up by 1.73% and Bajaj Finserv up by 1.70%. On the flip side, ONGC down by 2.82%, Power Grid Corporation down by 1.76%, SBI Life Insurance down by 1.32%, Tata Consumer Product down by 1.16% and Indian Oil Corporation down by 1.10% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 27.85 points or 0.37% to 7,601.32, France’s CAC increased 34.97 points or 0.5% to 7,044.22 and Germany’s DAX increased 22.07 points or 0.15% to 15,228.71.

Asian markets ended mostly higher on Tuesday, despite cautious mood ahead of the US inflation data due out later this week that could influence how fast the Federal Reserve raises interest rates. Strong US jobs data on Friday heightened the expectations for a half-point interest rate hike by the US central bank in March. Japanese shares settled marginally higher as investors reacted to a string of positive earnings results. Chinese shares ended higher even as rising tensions between the world's two largest economies after the US tightened export regulations on China. However, Hong Kong shares dropped after data showed the country's IHS Markit SAR Purchasing Manager's Index (PMI) declined to 48.9 in January from 50.8 in December.