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Indian markets ended lower with significant losses on Tuesday as profit booking in financial, FMCG, pharma, and select IT stocks weighed on the sentiment. Today, markets are likely to get cautious start ahead of the key US Fed policy decision later tonight, and the announcement of Interim Budget Thursday. Foreign fund outflows likely to dent sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 1,970.52 crore on January 30, provisional data from the NSE showed. Traders will be concerned after Asia Securities Industry & Financial Markets Association (Asifma) has raised concerns about the Securities and Exchange Board of India (Sebi) proposal to introduce a T+0 settlement cycle. The industry association of top foreign portfolio investors (FPIs) has stated that this move could give rise to several issues, including the bifurcation of the market, liquidity fragmentation, and deterioration of market quality. There will be some cautiousness with report that as liquidity in the banking system continues to remain tight, a segment of the bond market is expecting open market operations (OMO) purchases from the Reserve Bank of India (RBI) in order to infuse durable liquidity. However, some respite may come later in the day as the International Monetary Fund (IMF) raised India’s growth projection for 2024-25 (FY25) by 20 basis points (bps) to 6.5 per cent in its World Economic Outlook (WEO) update on Tuesday, citing buoyant domestic spending and improved global growth prospects. For FY24, the IMF raised India’s growth estimate by 40 bps to 6.7 per cent compared to its October report. Traders may take note of report that the government is considering tweaking production linked incentive (PLI) schemes for certain sectors including textiles, food processing, and pharmaceuticals. MSMEs and Hospital industry stocks will be in focus as Crisil research report that revenue of micro, small, and medium enterprises (MSMEs) in the hospital segment is expected to grow 8-12 per cent Y-o-Y this financial year to Rs 4.2-4.9 trillion, driven by growing demand for elective surgeries, outpatient department care and routine treatments, as well price hikes by healthcare providers. Investors continue to keep close eye on earnings of many companies for more directional cues. Meanwhile, Nova Agri Tech will make its debut today. 

The US markets ended mostly in red on Tuesday after strong US labour data, raised doubts on how soon the Fed could cut rates. Asian markets are trading mostly lower on Wednesday following overnight weakness on Wall Street.

Back home, Indian equity benchmarks ended lower on Tuesday, dragged down by Consumer Durables, Capital Goods and Power stocks amid mixed moves across global markets. After a positive start, the markets erased the gains in the initial hours itself and extended the losses as the day progress, as traders got cautious with report stating that wholesale prices of tur dal have increased 5% in the last one month despite the arrival of new crops and continuing imports from Myanmar as reduced acreage and decreased production for a second consecutive year impact supply. Some concern also came amid a private report stating that foreign Portfolio Investors (FPIs) have expressed concerns about market regulator Securities and Exchange Board of India’s (Sebi) plan to introduce instant trade settlement in the equity markets. Selling intensified towards the fag end as investors further slashed their positions in key stocks ahead of key events such as the interim budget and the US Fed interest rate decision. Traders overlooked the finance ministry’s statement that India is expected to become the third-largest economy in the world with a GDP of $5 trillion in the next three years and touch $7 trillion by 2030 on the back of continued reforms. Traders also paid no heed towards Union Minister of Agriculture & Farmers’ Welfare and Tribal Affairs, Arjun Munda’s statement that the agriculture sector in the country is making an important contribution to the economy and livelihood of crores of people. 54.6% of the country's workforce is engaged in agriculture and allied sectors’ activities. The share of agriculture sector in GDP is 18.6%, while the sown area is 139.3 million hectares, out of the total geographical area of the country. Finally, the BSE Sensex fell 801.67 points or 1.11% to 71,139.90 and the CNX Nifty was down by 215.50 points or 0.99% to 21,522.10.

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