The benchmark indices further extended losses in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, tumbled 530.27 points or 1.10% at 47,817.32. The Nifty 50 index skid 144.90 points or 1.02% at 14,094.

In the broader market, the S&P BSE Mid-Cap index fell 0.44% while the S&P BSE Small-Cap index lost 0.16%.

The market breadth was weak. On the BSE, 1,065 shares rose and 1,620 shares fell. A total of 141 shares were unchanged.

Investor sentiment was dented after the new coronavirus variant resulted in fresh lockdowns and other restrictions on movement in certain counties across the globe. However, the COVID-19 vaccine rollout in many countries offered some respite.

The Federal Open Market Committee (FOMC) monetary policy decision and the briefing by Chair Jerome Powell will remain on investor's radar today.

Domestic shares were also under pressure ahead of monthly derivatives expiry on Thursday and the upcoming Union Budget.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 1.73% to 23.6475. The Nifty 28 January 2021 futures were trading at 14,088, at a discount of 6 points as compared with the spot at 14,094.

The Nifty option chain for 28 January 2021 expiry showed maximum Call OI of 54.30 lakh contracts at the 14,500 strike price. Maximum Put OI of 47.70 lakh contracts was seen at 14,000 strike price.

Economy:

The International Monetary Fund (IMF) on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be almost a full percentage point less severe than expected. It said multiple vaccine approvals and the unveiling of vaccinations in some countries in December had boosted hopes of an eventual end to the pandemic.

IMF projected an impressive 11.5% growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth this year amidst the coronavirus pandemic.

The IMF's growth projections for India in its latest World Economic Outlook Update released on Tuesday reflected a strong rebound in the economy, which is estimated to have contracted by 8% in 2020 due to the pandemic.

India's economy, the IMF said, is projected to grow by 6.8% in 2022 and that of China by 5.6%. With the latest projections, India regains the tag of the fastest developing economies of the world.

Coronavirus Update:

Total COVID-19 confirmed cases worldwide stood at 10,02,70,602 with 21,57,349 deaths. India reported 1,76,498 active cases of COVID-19 infection and 1,53,724 deaths while 1,03,59,305 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

A total of 20,29,424 beneficiaries have so far been vaccinated for COVID-19 through 36,572 sessions held till the evening of 26 January 2021, the eleventh day of the immunisation drive, according to a provisional report of the Union Health Ministry.

Buzzing Index:

The Nifty Financial Services index fell 1.55% to 14,909.15. ICICI Lombard General Insurance Company (down 3.35%), Axis Bank (down 3.14%), Sriram Transport Finance Company (down 2.80%), HDFC (down 2.60%) and HDFC Bank (down 2.25%) declined.

Earnings Impact:

Aarti Drugs declined 2.22%. The drug maker's consolidated net profit soared 144.9% to Rs 68.03 crore on 12% rise in net sales to Rs 530.25 crore in Q3 December 2020 over Q3 December 2019. Consolidated profit before tax (PBT) surged 109.8% to Rs 90.37 crore in Q3 December 2020 as against Rs 43.08 crore in Q3 December 2019. Current tax expense for the quarter jumped 74.7% to Rs 24.29 crore as against Rs 13.90 crore in Q3 December 2019.

Can Fin Homes rose 1.44% after the housing finance company posted a 23.7% rise in net profit to Rs 131.92 crore on a 2.7% decline in total income to Rs 502.76 crore in Q3 FY21 over Q3 FY20. The housing finance company's profit before tax stood at Rs 177.48 crore in Q3 FY21, rising nearly 22% from Rs 145.57 crore in Q3 FY20. Tax expense grew 12% to Rs 45.39 crore in Q3 FY21 over Q3 FY20.

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