Tuesday, the Indian market is set to make a gap-down opening after stocks on Wall Street suffered a severe setback overnight amid renewed worries over widening financial losses.

Apart from global cues, traders look forward to the outcome of the central bank's monetary policy meeting on Tuesday. While marketmen expect the central bank to cut the repo rate by up to 50 basis points, the RBI's comments on future economic growth and its interest rate outlook would be closely watched by investors.

Meanwhile, the extent of buying by foreign funds and support if any from domestic institutions may influence market movement. On Monday, while FIIs bought shares worth Rs.669.85 crore on a net basis, domestic institutions, including mutual funds, bought shares worth Rs.182.7 crore, according to provisional data released by the National Stock Exchange.

Currently, markets across the Asia-Pacific region are trading sharply lower. Australia's All Ordinaries index is down 2.63%, China's Shanghai Composite index is declining 1.24%, Hong Kong's Hang Seng index is tumbling 3.79%, Japan's Nikkei 225 index is losing 3.35% and South Korea's KOSPI is down 1.61%.

Overnight, stocks on Wall Street saw a sharp sell-off led by losses in the financial sector despite better than expected earnings from Bank of America (BAC) and several M&A deals. BAC exceeded expectations on earnings front but marked up provisions for credit loss by a whopping $ 7 billion to $13.4 billion in the first quarter. The major averages

ended the session near their worst levels of the day. The Dow Jones Industrial Average moved down 3.56%, the Nasdaq Composite fell 3.88% and the S&P 500 index tumbled 4.28%.

The Indian ADRs also closed sharply lower across the board. Among the major decliners, ICICI Bank plunged 7.14%, HDFC Bank slumped 5.93%, Wipro tumbled 5.43%, Sterlite Industries fell 3.51%, Infosys declined 3.11% and MTNL moved down 2.69%.

Light sweet crude for May delivery nose-dived more than 8% to $45.88 a barrel, the lowest close in five weeks in New York trading on Monday, weighed down by a rising US dollar and further concerns over energy demand. US President Barack Obama said on Sunday the American economy remained under strain and Lawrence Summers, his top economic advisor, tempered hopes for a speedy recovery that have driven the stock market to successive gains. In Asian trading, crude oil is now trading at $45.75 a barrel, down 0.26%.

The rupee closed Monday's session weaker, weighed down by losses in the stock market and demand for dollars from oil refiners. After rising to an intra-day high of Rs.49.90, the currency pared its early gains and fell to the day's low of Rs.50.34 before closing at a three-week low of Rs.50.30/31 against the dollar, down 45 paise from the previous close.

Banking stocks may come under severe selling pressure following losses among their peers in the U.S. market overnight.

Religare Enterprises could be in focus after the company hiked its stake in a joint venture company Vistaar Religare Capital Advisors Ltd (VRCAL), from 50% to 74% for an undisclosed amount.

TCS may see some activity after the IT giant reported slower growth in net profit and revenues for the March quarter, but announced a 1:1 bonus to its shareholders.

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