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“We see multiple headwinds, including weakening India BoP dynamics, aggressive Fed hikes and rising US recession risks, which should drive INR weakness in coming months, with USD/INR at 82 by Q3 2022 and 81 by Q4 2022,” Nomura analysts said in a report.

The Dow Jones Industrial Average fell 532 points, or about 1.71%. The S&P 500 dipped 1.5%, and the tech-heavy Nasdaq Composite shed about 1.6%.

“If commodities cool off a bit, as we are seeing in the last four weeks, a lot of the earnings downgrades should see upgrades again and so we remain optimistic on that front. Yes that means sectorally, there will be downgrades in some metals or some of the other commodity led sectors but we should see upgrades in autos or industrials or certain categories of consumption and banks.”

If fuel prices were to stay or moderate from current levels, we do not estimate any significant impact on vehicle demand or on repayments or collections. However, if fuel prices were to increase by 10%-15% from current levels, we expect higher delinquencies particularly in the CV-CE segment.

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Margins remained pressured as companies deal with elevated attrition resulting in high retention costs and increase in travel and discretionary expenses. Infosys and TCS may perform well but many others face risk of growth downgrades, Kotak said.

"The addition of new customers and capabilities makes for a robust outlook for MTAR,” it said, adding that working capital improvement remains key.Differentiated engineering capabilities and lower raw material risk compared with traditional capital goods companies should help protect profitability in an inflationary environment, it further said.

The partially convertible rupee was trading at 79.13/14 per dollar by 0822 GMT, after hitting a life low of 79.15. It had touched the previous record low of 79.12 last week and had closed trading at 78.95 on Monday.

Frontline indices erased over 1 per cent gains and settled with minor cuts, with the 30 share pack Sensex, settling 100 points lower at 53,134. Its broader peer, Nifty50, ended the session near the 15,800 mark.

“In case of largecap Indian metals and mining stocks, we do not know how it will pan out but if you take price to book as a trough and keep earnings aside for a moment and look at where the balance sheet is today versus when it was in 2009, for some of the stocks, the markets are being too pessimistic versus the underlying situation.”