Domestic indices kicked off Tuesday's session slightly higher but gave up gains in the early trading hours. The likely course of the market for the near term will be shaped by a host of domestic and global economic data set to be released this week.

The BSE Sensex opened at 60,805 points but quickly tumbled almost 1%, while NSE Nifty-50 plunged below the 18,000 mark after opening at 18,121 points and Nifty bank gave up more than 1% or 500 points after opening at 42,642 points.

As of 12:40 PM, Sensex is trading down 500 points or 0.9% to 60,237 points, whereas Nifty gave 150 points or 0.9% to 17,950 points and Bank Nifty erased 480 points or 1.1% to trade near the 42,100 level.

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Commenting on the Nifty outlook, Anand James, Chief Market Strategist at Geojit Financial Services, said, "Despite the volatility yesterday, the close above the 18,070 region has retained upside hopes, but with modesty targets of 18,240-320. Meanwhile, an early inability to float above the 18,040/18,000 region today, could initiate a breakdown towards 17,800."

Commenting on a near-term market outlook, Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services, said, "After the positive market news of last Friday the market would be keenly watching the Powell Speech today and the CPI data to be released tomorrow. Powell is unlikely to depart from the Fed's hawkish stance but if the CPI data of Wednesday confirms the declining trend in inflation, the market will get ahead of the Fed and will start pricing in a terminal rate below 5% and possible rate cuts by end 2023."

"On the other hand, if inflation continues to remain high, there can be a sell-off in the market discounting higher rates and a hard landing for the US economy. So, investors may wait for these crucial inputs before taking a call on near-term market trends." He added.

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Wall Street ended mixed on Monday after a sharp rally on Friday on the back of declining wage growth. The Dow Jones Industrial Average closed 112 points or 0.3% lower, while S&P 500 gave up a meager 3 points or 0.07% and the Nasdaq composite gained 66 points or 0.7%.

Seema Shah, chief global strategist at Principal Asset Management said, "Many investors have been reassured by the strength of the US labor market. Yet...the Federal Reserve is determined to tighten monetary policy until that strength is eradicated — the recession clock is ticking."