The Dow Jones Industrial Average slid 900 points, or 2.8%. The S&P 500 dropped 3.2%, and the Nasdaq Composite sank 4.1%. Bond prices also fell sharply, sending their yields higher, after a report showed inflation decelerated to 8.3% in August, instead of the 8.1% economists expected. Big tech stocks swooned more than the rest of the market, as all 11 sectors in the S&P 500 dropped.

However, the COMEX spot price of gold was marginally lower at USD 1,723.60 per ounce compared to USD 1,723.70 per ounce on Monday.Unlike gold, silver price in the national capital jumped Rs 760 to Rs 57,974 per kg. On Monday, the level was Rs 57,214 per kg.

"Investors are being more circumspect in making investment decisions and taking longer to close deals as the competitive pressures witnessed in the previous year have ebbed and the cost of capital has gone up," Soni said.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said, “The upmove with range-bound action continued in the market on Tuesday, and Nifty closed higher by 133 points amidst lacklustre type movement. After opening with an upside gap, the market moved up in the early hours.

"Corporate flows helped the rupee to gain against the dollar," said Anil Bhansali, head of treasury at Finrex Treasury Advisors. "With overseas investors turning net buyers of local securities the sentiment is also weighing on the rupee. We could see fresh buying interest from oil companies at 79.05 level."

Compared to this, the current outstanding stock of government securities is Rs 84.71 lakh crore across 100 instruments as of June 2022 while trading volume in G-Secs was Rs 126.6 lakh crore in FY22 which is about seven-times of the trading in corporate bonds.