Markets open negative: Sensex down nearly 700 points, Nifty below 16,600

The benchmark indices tumbled on the bourses after a holiday on Tuesday (March 1). Among sectors, bank and auto index are down a percent each while buying is seen in metal names. Bank Nifty was down more than 2 percent, giving up 35,400. Broader markets were largely in the red.

The benchmark Sensex was down neary 700 points or 1.1 percent around 55,600. The Nifty50 NSE is just bove 16,600, falling more than 1 percent.

Nifty reversed early losses to end in the positive for the second consecutive session on February 28. At close, Nifty was up 0.81 percent or 135.5 points at 16,793.9.

Nifty recovered smartly from the morning lows on February 28 with sharply positive advance decline ratio. Nifty could now face resistance at 16,837-16,900 band while 16,516-16,548 band could provide support.

Stocks to watch out for

Some of the stock-specific actions can be witnessed in stocks such as Route Mobile (successfully completed the acquisition of MR Messaging FZE), Panacea Biotec (selling the pharmaceutical formulations brands of its subsidiary to Mankind Pharma), Vipul Organics (will issue one bonus share for every four shares held by shareholders).

Asian stocks fall

Asian stocks fell Wednesday as the war in Ukraine and sanctions on Russia spiked crude oil prices to nearly $108 a barrel, hurting the outlook for economic growth, aiding demand for sovereign bonds, and threatening flows of energy, crops and metals.

US stocks end lower

The Nasdaq Composite Index eked out a slight gain on Monday, but stocks ended the session lower and booked another month of declines, as talks between Russia and Ukraine ended without an agreement. Oil prices continued to rise, with Brent crude, the global benchmark, breaching the $100-a-barrel mark. European stocks slumped on Monday.

Major US stock indexes ended sharply lower Tuesday, with the Dow Jones Industrial Average showing the sharpest decline, as Russia stepped up attacks on Ukraine and warned it would begin “high-precision” strikes on the capital, Kyiv. There wasn’t any tangible progress made in cease-fire talks between Russia and Ukraine held near the Ukrainian border with Belarus on Monday, though the two sides agreed to keep talking.

Treasury note yields fall

The yield on the 10-year Treasury note fell 12.8 basis points Tuesday to 1.708 percent. That compares with around 2 percent. ahead of the invasion. The Institute for Supply Management said its US manufacturing index rose to 58.6 percent. in February, up from a 14-month low of 57.6 percent. a month earlier despite tight inventories, rising costs, supply-chain challenges and a tough hiring environment.

US trade deficit jumps 7.1% in January

In economic reports, the US trade deficit jumped 7.1 percent in January to $107.6 billion and hit a new all-time high for the second month in a row reflecting huge American appetite for imported goods such as autos and oil. The deficit rose from a revised $100.5 billion in December. U.S. goods imports rose 1.8 percent in January to $262 billion — also a record. Exports of US-made goods slid 1.8 percent to $154.8 billion. Meanwhile, a February reading of a Chicago-area purchasing managers index dropped to 56.3 from 65.2.

Production of eight infrastructure sectors in India expanded by 3.7 percent in January against 1.3 percent in the same month last year on better show by coal, natural gas and cement industries, according to official data released on Monday. Crude oil and fertiliser production recorded negative growth in January. The core sector industries had grown by 4.1 percent in December 2021.

Global shares mixed on Tuesday on plans of further talks

World shares were mixed Tuesday after talks between Russia and Ukraine aimed at ending the war just yielded an agreement to meet again.

European markets opened mostly lower while Asian shares and US futures were mostly higher. Oil prices rose.

Russia is a major energy producer and surging oil prices and increasing financial pressure from the US and allies on Russia for its invasion of Ukraine were adding to uncertainty about the global economic outlook.

France's CAC 40 lost 0.6 percent to 6,622.35. Germany's DAX shed 0.7 percent to 14,357.77, while Britain's FTSE 100 edged 0.1 percent higher, to 7,467.27.

Japan's benchmark Nikkei 225 gained 1.2 percent to finish at 26,844.72. Australia's S&P/ASX 200 surged 0.7 percent to 7,096.50. Hong Kong's Hang Seng added 0.2 percent to 22,761.71, while the Shanghai Composite rose nearly 0.8 percent to 3,488.83. Markets were closed in South Korea for a holiday.

Currency outlook

On the daily technical chart, a pair crossed its trend line resistance of 75.0600. MACD is showing positive divergence on the daily technical chart and RSI is also fetching above 60 levels, said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. As per the daily technical chart, we observed that a pair crossed its trend line resistance and showing strength on the daily technical chart. Looking at the technical set-up, we expect a pair could test its resistance levels of 75.8500-76.1000 again; support is placed at 75.0500.

Bullion outlook

Gold and silver gained due to safe-haven appeal in war time. Both precious metals also gained amid heavy sell-off in the global equity markets and record surge in the international crude oil prices. The US equity markets plunged again and supported safe haven buying in precious metals.

"We expect gold and silver prices to remain positive and any decline in the prices would be an opportunity for buying at lower levels," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. Gold could test $1970 per troy ounce and silver could also test $26.20 per troy ounce in the upcoming sessions. Gold has support at $1,922-1,908, while resistance at $1955-1970 per troy ounce. Silver has support at $25.20-24.84, while resistance is at $25.88-26.20 per troy ounce. In INR gold has support at Rs 51,358–50,900, while resistance is at Rs 52,075–52,334. Silver has support at Rs 6,983- 65,786 while resistance is at Rs 68,913–69,646.

Jet fuel prices at all-time high

Jet fuel prices on Tuesday were increased by 3.3 percent to all-time high levels across the country, in step with international oil prices surging to over seven-year-high.

This is the fifth hike in jet fuel or Aviation Turbine Fuel (ATF) prices this year following an unrelenting rise in global oil prices, but petrol and diesel prices remained unchanged for a record 116th day in a row, coinciding with electioneering to elect new governments in states like Uttar Pradesh and Punjab.

India's GDP growth slows

India's GDP growth slowed down to 5.4 percent in October-December 2021 from 8.5 percent in the previous quarter, data released on February 28 by the Ministry of Statistics and Programme Implementation showed. The statistics ministry also said India's GDP will likely grow by 8.9 percent in FY22, down from its first advance estimate of 9.2 percent, released in early January 2022. Construction and Manufacturing were the laggard sectors. The GDP growth rate of 5.4 percent for the third quarter of FY22 is below expectations. As per a Moneycontrol survey, the GDP was seen rising by 6.2 percent on a year-on-year basis last quarter.

Fiscal decifit up

The Centre's fiscal deficit rose to 58.9 percent of the FY22 target in April 2021-January 2022, data released on February 28 by the Controller General of Accounts showed. In April-December 2021, the fiscal deficit had amounted to 50.4 percent of the full-year target.

China PMI activity up

Activity in China's services sector grew at a faster pace in February, official data showed on Tuesday. The official non-manufacturing Purchasing Managers' Index (PMI) was at 51.6 in February versus January's 51.1. The official manufacturing purchasing managers’ index (PMI) rose to 50.2 in February, from 50.1 in January. Meanwhile, the Caixin/Markit manufacturing PMI rose to 50.4 in February from 49.1 in January. China's official composite PMI, which includes both manufacturing and services activity, stood at 51.2, compared with 50.1 in January.

Oil prices soar

Oil prices soared and remained sharply higher despite an agreement by member countries of the International Energy Agency, including the US, to release 60 million barrels of crude from strategic reserves. West Texas Intermediate crude for April delivery surged 8% to close at $103.41 a barrel on the New York Mercantile Exchange, the highest settlement for a front-month contract since July 22, 2014, according to Dow Jones Market Data. Oil prices continued their upward trek in the morning of Asia trading hours, with international benchmark Brent crude futures up 3.39% to $108.53 per barrel.

Published on: Wednesday, March 02, 2022, 09:28 AM IST