Indian equity benchmarks made a negative start and soon extended their losses on Tuesday tracking weakness in global peers. Sensex and Nifty were trading lower with cut of around 0.80-0.90% in early deals as traders avoided risky bids ahead of monthly Nifty F&O expiry later in the day. Continued selling in IT and TECK counters, which were down by over 3%, amid global concerns over AI-related disruptions also dampened the sentiments in the markets. There was some cautiousness as the government halved the rate of duty benefits under the export support scheme, the Remission of Duties and Taxes on Exported Products (RoDTEP), prompting the exporting community to seek a reconsideration of the decision. 

On the global front, Asian markets were trading mixed, following the broadly negative cues from Wall Street overnight, amid mounting concerns over AI-related disruptions, lingering uncertainty about US President Donald Trump's tariff policies and escalating tensions between the US and Iran.

Back home, traders took note of report that Finance Minister Nirmala Sitharaman has attributed rising gold prices to heavy purchases by central banks globally, and said the government and RBI are keeping a close watch on the precious metals' imports, though they are not at an ‘alarming proportion’.

The BSE Sensex is currently trading at 82555.78, down by 738.88 points or 0.89% after trading in a range of 82481.53 and 83079.51. There were 6 stocks advancing against 24 stocks declining on the index.

The few gaining sectoral indices on the BSE were Metal up by 0.36%, Oil & Gas up by 0.20% and Energy up by 0.12%, while IT down by 3.44%, TECK down by 3.35%, Telecom down by 1.89%, Realty down by 1.26% and Consumer Discretionary down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 0.31%, Asian Paints up by 0.30%, Power Grid up by 0.26%, SBI up by 0.25% and Tata Steel up by 0.12%. On the flip side, HCL Technologies down by 4.00%, Eternal down by 3.79%, Infosys down by 3.59%, Bharti Airtel down by 3.48% and TCS down by 3.29% were the top losers.

Meanwhile, days after the government changed the Consumer Price Index (CPI) inflation series-based year, Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that the new CPI inflation series based on 2024 prices will better reflect Indian households' consumption patterns and reduce volatility. He noted that in both ways, it will help in better CPI estimation. Data released on February 12 showed retail inflation was 2.75 per cent in January under the new CPI series, which uses 2024 as the base year instead of 2012. The Ministry of Statistics and Programme Implementation released the new CPI series, which widens coverage and tracks prices of 358 items, sharply up from 299 items in the old series. Headline inflation in January, the first month based on the new series, was above the lower end of the RBI's tolerance band of 2-6 per cent, a first since June 2025.

Regarding the expected changes to CPI projection from the new series Malhotra said ‘If the whole methodology is changing, then obviously the target will undergo a change’. He noted ‘Next estimate that we give out in the April policy will certainly take into account all the changes that are being brought in’. The change in methodology for computing headline CPI also comes when the central bank's flexible inflation targeting regime is up for review. The government, in consultation with the RBI, determines the CPI inflation target once every five years. Under the monetary policy framework, the government has set a 4 per cent CPI inflation target from April 1, 2021, to March 31, 2026, within a tolerance band of 2 per cent to 6 per cent.

According to the RBI Governor, the central bank has already submitted its recommendation to the government, following the stakeholder views, and it is still under examination by the government. He said ‘The government will very quickly be coming out with the target’. However, he noted that ‘merely because of the change in CPI series’, the target may not change. The RBI had released a discussion paper on August 21, seeking views on four questions, including whether the 4 per cent inflation target was optimal for balancing growth with stability in India. While emphasising that the flexible inflation targeting (FIT) regime has been successful, the central bank is also looking at whether core inflation would be the best guide for monetary policy.

The CNX Nifty is currently trading at 25499.45, down by 213.55 points or 0.83% after trading in a range of 25482.85 and 25641.80. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 0.34%, Dr. Reddy's Lab up by 0.34%, Coal India up by 0.33%, Axis Bank up by 0.31% and Power Grid up by 0.28%. On the flip side, HCL Technologies down by 3.99%, Eternal down by 3.73%, Infosys down by 3.59%, Bharti Airtel down by 3.51% and TCS down by 3.27% were the top losers.

Asian markets were trading mixed; Taiwan Weighted jumped 847.88 points or 2.51% to 34,621.14, Nikkei 225 surged 515.3 points or 0.91% to 57,341.00, KOSPI increased 119.78 points or 2.05% to 5,965.87 and Shanghai Composite strengthened 47.71 points or 1.17% to 4,129.78. On the other hand, Hang Seng declined 544.91 points or 2.05% to 26,537.00, Straits Times fell 36.52 points or 0.72% to 5,004.81 and Jakarta Composite was down by 15.7 points or 0.19% to 8,380.38.