Check out all the latest developments on the Russia-Ukraine conflict
Ajit Mishra, VP – Research, Religare Broking:
Markets traded volatile and lost over a percent amid feeble global cues. The news of war intensifying between Russia-Ukraine led to a weak start, which further deteriorated citing a sharp surge in crude oil prices. However, a rebound in the last hour of the trade trimmed some losses. Consequently, the Nifty index settled around 16,605.95; down by 1.12%. Most sectoral indices ended lower in line with the benchmark while the broader indices traded mixed.
Markets have been gradually inching lower amid erratic intraday swings but the dent is more severe on the broader front. We feel the volatility is here to stay and the scheduled weekly expiry would further add to choppiness on Thursday. Among the sectors, metal and energy pack look firm while others are witnessing mixed trends. Participants have no option but to align their positions according to the trend and prefer a hedged approach.
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services:
Equity markets continued with its weakness as various developments on the Russia Ukraine front led to spiraling of crude and other commodity prices. Indian markets opened gap down in line with global peers as various sanctions imposed on Russia threatens to disrupt the supply of crude and various other commodities. However market did recover towards the end as reports came on of a second round of peace talks between Russia & Ukraine scheduled for Wednesday evening provided hope of some relief.
Volatility is expected to remain high in near term given elevated Russia-Ukraine conflict, upcoming state election results as well as US Fed meeting. Further, market would watch out for developments on the Russia Ukraine talks. If the Russia-Ukraine conflict elongates and leads to elevated energy prices for longer, it may impact margins and earnings. We expect weakness in Nifty to continue until it is below its crucial 200 DEMA of ~16,700 levels. However on the downside, last week’s low of 16200 may act as a strong support. Traders need to be cautious of sharp movements on either direction, while investors can use the current dip to gradually add quality blue chip companies in their portfolios.
Santosh Meena, Head of Research, Swastika Investmart:
Indian markets had to face a double whammy situation today where geopolitical tension is a major headwind while a sharp surge in crude oil prices is a key risk for the Indian market because Brent Crude has crossed the $110 mark. If we look at the headline indices then the market was looking very weak but there was some buying in the broader market from lower levels. Commodity stocks did well amid rising commodity prices whereas life insurance companies also witnessed strong buying from lower levels. As of now, news flows related to the Russia-Ukraine crisis and movement in crude oil prices are the key dominating factors for the volatility in the market.
Technically, market texture has become weak with sell on rise structure after Nifty slipped below its 200-DMA however Nifty is trying to find its feet in the 16400-16200 zone but the confidence of bulls will be back only above 17100 level while if Nifty slips below 16200 then 15900 will be the next important support level.
Bank Nifty is trading near an important psychological support level of 35000 and if it manages to hold this level then we can expect some short covering towards the 36350-36750 zone while if it slips below 35000 level then 34000 will be the next important support level.
Short-term traders should stay light amid lots of uncertainties where 16200 should be their trading stop loss for long positions. Investors should focus on the domestic economy facing sectors like capital goods, infrastructure, real estate, banking, etc.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
Markets retreated sharply, but came off day’s lows as bearish sentiment prevailed across the global indices, which weighed on local investors. The continuing war between Russia and Ukraine has forced investors not to take bullish bets till the time the raging war subsides. Nifty has maintained a lower top formation while on daily charts, it has formed a bullish Harami candlestick formation which supports a pullback rally. The short-term texture of the market is weak and a fresh rally is possible only after the index breaches 16680. Above the same, the index could rally up to 16750-16800 levels. However, as long as the index is trading below 16650, the chances of hitting 16550 and 16500 are bright.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
Nifty is witnessing a short term consolidation in the range of 16200-16800 for the last few sessions. The recent bounce fizzled out near 16800, which is now acting as a crucial resistance as per the principle of role reversal. Thereon the index nosedived in the opening trade on March 2. On the downside, however, it received support near the hourly lower Bollinger Band. Over there the Nifty formed a Popgun pattern on the hourly chart and is once again poised for a bounce towards 16800. On the downside, 16500-16480 is a near term support zone with major support at 16200.
Mohit Nigam, Head – PMS, Hem Securities
Benchmark indices recovered some of its losses at the end with Nifty ending at -1.12% and Sensex ending at -1.38%. Auto (weak monthly numbers) and banking stocks witnessed selling pressure while strong buying was witnessed in metal and power stocks. The GDP figure for the third quarter was reported at 5.4%. Petrol and diesel price hikes are likely to resume after state elections get over next week to bridge the Rs 9 a litre gap.
Investors have to be a little cautious as the near term seems a little uncertain but we have a positive outlook on Indian equities in the long term and believe that one should incrementally invest in every dips. On the technical front 16,400 and 17,000 are immediate support and resistance in Nifty 50 respectively. For Bank Nifty 34,800 and 36,100 are immediate support and resistance respectively.
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Vinod Nair, Head of Research at Geojit Financial Services:
The strengthening of war drowned the global market, alarming the Indian market to start with substantial weakness. The negative effect was more on large-caps in-line with weak Q3 GDP data and downgrade of FY22 growth to 8.9% from 9.2%, by NSO. Mid & Smallcaps outperformed, in the context of the recent carnage of the broad market, making it a better pick. It makes sense to deploy the surplus cash in your portfolio in a step-by-step manner assuming stability in the future on a medium to long-term basis. The weakness subsided by the end of the day. However, volatility is expected in the near term given boiled crude price, state election outcome, and Fed policy status in the coming weeks.
S Hariharan, Head of Sales, Emkay Global Financial Services:
The market is currently caught between many macro cross-winds – higher inflationary pressure exerted by sharp rises in commodities prices across the board (crude oil, gas, metals, agri commodities), determination on the part of DM central banks to withdraw monetary accommodation, and slowing growth impulses. As a result, earnings estimates are undergoing downward revisions for the first time in 5 quarters, while index valuation at 19x FY23e EPS is still higher than longer-term averages.
FII flow environment has turned decisively negative in CY22, with net sell flow of $9 bn so far, and while DIIs have been absorbing sell flow with a similar quantum of deployment, historically, it has been seen that weak price action is followed by outflows from DIIs as well. As a result, the flow picture looks quite adverse despite recent 10% correction in Nifty. Financial Services appear weakest on account of consensus over-weight positions, while Materials names have attracted incremental inflows due to under-ownership among institutions.
Rupee at close: Rupee ends at 75.71 per US Dollar against previous close of 75.34 per US Dollar
Market at close: Benchmark indices ended the session in the red buy recovered about 600 points with Sensex falling 689.78 points or 1.23% at 55557.50, and the Nifty shedding 165.10 points or 0.98% at 16628.80. About 1642 shares have advanced, 1537 shares declined, and 101 shares are unchanged.
Among the sectors, the auto and banking index shed 2 percent each while buying was seen in metals and power stocks.
