Indian equity benchmarks tumbled over a per cent on Tuesday, dragged down by heavy losses in IT stocks amid concerns over artificial intelligence-led disruption and renewed trade-related uncertainties. Rising global crude prices amid escalating US-Iran tensions also hit investor sentiment.  

Some of the important factors in trade:

New CPI series to reduce volatility in headline inflation: Reserve Bank of India (RBI) Governor Sanjay Malhotra said that the new CPI inflation series based on 2024 prices will better reflect Indian households' consumption patterns and reduce volatility.

Govt monitoring gold imports closely: Finance Minister Nirmala Sitharaman 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’. 

Govt halves rate of duty benefits under RoDTEP scheme for exporters: The government has reduced the duty benefits under the export support scheme, the Remission of Duties and Taxes on Exported Products (RoDTEP), by half, prompting the exporting community to seek a reconsideration of the decision. 

Power stocks in watch: Comptroller and Auditor General (CAG) of India K Sanjay Murthy has said that the power sector is serving as the backbone for India's economy, and a reliable power supply is vital for sustaining country's economic growth.  

Global front: European markets were trading mostly in green despite a resurgence in trade uncertainty coupled with artificial-intelligence disruption concerns. Asian markets ended mixed as traders evaluated the potential turbulence in the trade tariff environment following the U.S. Supreme Court's ruling on reciprocal tariffs.  

Finally, the BSE Sensex fell 1068.74 points or 1.28% to 82,225.92 and the CNX Nifty was down by 288.35 points or 1.12% to 25,424.65.        

The BSE Sensex touched high and low of 83,079.51 and 81,934.73 respectively. There were 8 stocks advancing against 22 stocks declining on the index. 

The top gaining sectoral indices on the BSE were Power up by 1.05%, Metal up by 0.99%, Utilities up by 0.90%, Oil & Gas up by 0.68% and Energy up by 0.60%, while IT down by 4.53%, TECK down by 3.82%, Realty down by 2.61%, Telecom down by 1.79% and Consumer discretionary down by 1.12% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.94%, Hindustan Unilever up by 0.62%, Tata Steel up by 0.53%, Power Grid Corporation up by 0.49% and Titan Company up by 0.24%. On the flip side, Tech Mahindra down by 6.60%, HCL Technologies down by 6.10%, Eternal down by 5.28%, Infosys down by 3.91% and TCS down by 3.79% 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.

CNX Nifty touched high and low of 25,641.80 and 25,327.60 respectively. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.41%, Coal India up by 1.28%, JSW Steel up by 1.27%, Hindalco up by 0.99% and Hindustan Unilever up by 0.83%. On the flip side, Tech Mahindra down by 6.17%, HCL Technologies down by 5.83%, Eternal down by 5.07%, TCS down by 3.56% and Infosys down by 3.56% were the top losers.  

European markets were trading mostly in green; France’s CAC rose 2.83 points or 0.03% to 8,500.00 and Germany’s DAX gained 11.63 points or 0.05% to 25,003.60, while UK’s FTSE 100 decreased 27.83 points or 0.26% to 10,656.91.

Asian markets ended mixed on Tuesday amid concerns over geopolitical tensions and US tariff risks. Hong Kong shares declined, tracking a broad selloff on Wall Street overnight. Seoul shares notched up to another record high, led by gains in technology sector stocks ahead of an earnings report from US chipmaker Nvidia later this week. Japanese shares rose as markets reopened after a long holiday weekend, with fiber-cable manufacturers leading the gains due to growing expectations for AI infrastructure spending. Chinese markets rallied as traders returned from a nine-day Lunar New Year break and cheered potentially lower US tariffs, while China left its benchmark lending rates unchanged for a ninth straight month to maintain currency stability.