Concerns about the pace of the economic growth following the quake in Japan rattled investors worldwide

The local market is likely to witness a sharply lower opening on the back of a massive decline all across Asia on Tuesday morning. US markets closed in the red overnight on concerns over the impact of the Japanese quake on the global economy. Concerns about the a slowdown in economic growth in Asia following the devastation in Japan last week led the markets in the region lower in early trade on Tuesday. News of another explosion at a Japanese nuclear reactor rattled investors worldwide. The SGX Nifty was down 83.50 points at 5,472 compared to its previous close of 5,555.50 on Monday.

Yesterday, the Indian market opened flat, tracking the weak Asian markets in the aftermath of the huge earthquake that struck the north-eastern region of Japan on Friday. Concerns over the Reserve Bank of India's (RBI) move on interest rates in its mid-quarter policy review on Thursday also kept investors on the sidelines. Metal, oil & gas and banking counters witnessed decent demand pushing the indices higher in mid-morning trade.

The marginal rise in headline inflation for February resulted in the market paring some of the earlier gains and trading was range-bound thereafter. The indices touched intra-day highs in late trade, on all-round buying support that began post-noon. The market closed a tad below the day's high. The Sensex (up 1.46% or 266 points) and Nifty (up 1.58% or 86 points) closed at their best levels in eight days, both in terms of percentage and points.

The market is trading close to its extreme levels, after which there is a strong probability of a reversal.

US markets closed lower on Monday on concerns over the impact of the devastating earthquake in Japan last week on the world economy. Nuclear power stocks were down following news of explosions at Japanese nuclear power facilities. Shaw Group plunged 9.2% while Cameco Corp tumbled 13% on the New York Stock Exchange. Both nuclear power companies traded on volume that was more than 10 times their 10-day average. General Electric Co, which has combined nuclear ventures with Hitachi, declined 2.2% and was the top percentage decliner on the Dow.

The Dow fell by 51.24 points (0.43%) at 11,993.16. The S&P 500 shed 7.89 points (0.60%) at 1,296.39 and the Nasdaq declined 14.64 points (0.54%) at 2,700.97.

Markets in Asia were in the red in early trade on Tuesday on worries about the slowdown in economic growth in the region. Production shutdown at Japanese factories due to power outages and damage to infrastructure also added to the pressure. News of a third explosion at a nuclear power plant on Tuesday led the Nikkei sharply lower for the second day in a row.

The Shanghai Composite was down 1.65%, the Hang Seng tumbled 3.65%, the Jakarta Composite declined 1.10%, the KLSE Composite was down 0.63%, the Nikkei 225 sank 6.45%, the Straits Times tanked 2.33%, the Seoul Composite fell 1.35% and the Taiwan Weighted was 1.49% lower in early trade on Tuesday.

Meanwhile, oil prices fell on Monday on the prospect of lower demand from quake-hit Japan, but losses were capped by mounting Middle East supply concerns as Saudi Arabia sent troops into Bahrain.

New York’s main contract, light sweet crude for April delivery, shed 99 cents to $100.17 a barrel, after earlier falling below $99 for the first time in two weeks. In London afternoon trade, Brent North Sea crude for April lost 63 cents to $113.21, after earlier tumbling to a three-week low of $111.16 per barrel.