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Indian equity indices ended lower on Monday as traders booked their profits after gains in previous session. Today, markets are likely to make positive start, tracking firm cues from other Asian markets. Traders may get some engagement as India and the European Union (EU) announced the formation of three working groups under the Trade and Technology Council that was set up to deepen strategic ties with the trade bloc. To lay the groundwork, the working group will cover key issues such as strategic technologies, digital governance and connectivity; green and clean energy technologies; and trade, investment and resilient value chains. Meanwhile, RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) started its three-day meeting on Monday amid expectations of a smaller 25 basis points rate increase or a pause on the rate hiking spree that started in May last year to check inflation. The decision of the six-member rate setting panel will be announced by the Governor on Wednesday. Traders may take note of report that Revenue Secretary Sanjay Malhotra said that India will not overhaul its Goods and Services Tax (GST) regime in the next fiscal year, delaying a move it has been considering for more than a year to simplify its tax structure and reduce the burden on consumers. Besides, the government said it is aware of the downside risks to the Indian economy and will closely monitor the current account deficit (CAD) in view of the decline in export growth. There will be some buzz in oil and gas industry stocks as Prime Minister Narendra Modi said that India’s share in the global oil demand is expected to increase to 11 per cent, while the gas demand is expected to rise up to 500 per cent. He underlined that new opportunities for investment and collaboration are being created by the expanding energy sector of India. Quoting the International Energy Association, the prime minister remarked that India's energy demands will be highest in the present decade which presents an opportunity for the investors and stakeholders of the energy sector. All eyes would be on December quarter results of three Adani group companies Adani Ports & SEZ, Ambuja Cements and Adani Green Energy Adani Group, which are scheduled for today.

The US markets ended lower on Monday as investors grew increasingly cautious of rising bond yields.  Asian markets are mostly trading in green on Tuesday, despite weak cues from US markets overnight, ahead of the US Federal Reserve Jerome Powell's speech later in the day.

Back home, Indian equity benchmarks ended lower on Monday due to intense selling pressure in Metal, Utilities and power stocks. Besides, a sharp decline in the rupee against the US dollar also put pressure on domestic equities. Markets made a cautious start and stayed in red throughout the day as traders were concerned as foreign investors pulled out Rs 28,852 crore from Indian equities in January, making it the worst outflow in the last seven months, primarily due to attractiveness of the Chinese markets. Some anxiety also came as the government hiked windfall profit tax levied on domestically-produced crude oil as well as on the export of diesel and ATF, in line with firming international oil prices. The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) has been increased to Rs 5,050 per tonne from Rs 1,900 per tonne.  Key indices continued to show a sluggish trend in late afternoon session as market participants avoided taking any long positions ahead of a three-day policy meeting of the Reserve Bank of India’s (RBI's) monetary policy committee. The Indian central bank is likely to raise rates by 25 basis points despite signs of softening retail inflation. Traders overlooked latest data released by the central bank showing that the Reserve Bank of India’s foreign exchange reserves rose $3 billion to $576.76 billion in the week ended January 27. The current level of reserves is the highest since the week ended July 8, 2022. Traders took a note of the Reserve Bank’s statement that India's banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders, amid concerns over banks' exposure to the embattled Adani Group. Finally, the BSE Sensex fell 334.98 points or 0.55% to 60,506.90 and the CNX Nifty was down by 89.45 points or 0.50% to 17,764.60.

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