It was a bloodbath on Dalal Street as Russia went to war with Ukraine. It was the stock markets biggest fall in two years. The benchmark indices plunged deeper since the markets opened for trading. BSE companies erased market cap of more than 13 lakh crore today.
All the sectoral indices ended with a loss of 3-8 percent, while BSE midcap and smallcap indices shed over 5 percent each.
The smallcap and midcap indices suffered even bigger losses. The National Stock Exchange's Nifty Smallcap 50 crashed 6.55 percent. Nifty Smallcap 100 tumbled 6.25 percent. Nifty Midcap 50 crashed 6.16 percent. Nifty PSU Bank index crashed 8.26 percent, while the Nifty Private Bank index tumbled 5.98 percent.
At close, the Sensex was down 2,702.15 points or 4.72 percent at 54,529.91. The Nifty was down 815.30 points or 4.78 percent at 16,248.00. About 240 shares have advanced, 3084 shares declined, and 69 shares are unchanged.
All stocks on the Nifty50 closed in the red. Shares were down up to 10 percent. Fifty percent of Nifty stocks are now down more than 20 percent from 52-week highs.Tata Motors, IndusInd Bank, UPL, Grasim Indusries and Adani Ports were the biggest losers.
All the 30 stocks that are part of the benchmark Sensex close with huge losses. BSE companies erased market cap of more than Rs 13 lakh crore today. Nearly half of the scrips that are part of the Sensex crashed by more than 5 percent. IndusInd Bank crashed 7.88 percent to Rs 875.80. Mahindra & Mahindra tumbled 6.15 percent to Rs 797.50. Bajaj Finance crashed 6.02 percent to Rs 6626.10. Axis Bank 5.99 percent lower at Rs 730.65. Tech Mahindra 5.75 percent down at Rs 1332.70; Maruti Suzuki 5.65 percent down at Rs 8209.95; Tata Steel 5.61 percent down at Rs 1074.95; Bajaj Finserv 5.57 percent down at Rs 15246.40 and HDFC Bank 5.48 percent down at Rs 1419.60 were among the major Sensex losers.
Volatility to remain elevated
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities said, "Nifty has broken significant support level at 16,600 and witnessed significant selling pressure in line with global markets. We believe volatility will remain elevated on account of an external shock and expect March series to witness further negative bias. Though the bias is negative, We await derivatives data to establish objective levels before taking a strong positional stance from here on. Investors can use further deep corrections to buy/average and traders to define risk in uncertain times."
Investors press panic button
Investors turned jittery and pressed the panic button after reports emerged that Russia has taken military action against Ukraine. As the mood was sombre across the global equity markets, traders back home also followed suit and pressed the sell button, resulting in across-the-board selling. Also, the F&O expiry pressure also gave investors the reason to cut their position further due to escalating geo-politicial tensions, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
Technically, after a long time, benchmark Nifty closed below the 200 day SMA and has also formed a long bearish candle on daily charts, which suggests further weakness from the current levels. Considering the uncertainties hovering around, the index may trade lower between the highs of 16800 and 16,000. The market is in a corrective mode and it would complete its corrective pattern between 16,200 and 16,000. For the traders, 16,400 and 16,500 could act as intraday resistance while 16,100-16,000 could be the immediate support zone, Chouhan said.
Sachin Gupta, AVP, Research, Choice Broking said, Technically, the Nifty has beached the prior support of 16800 and moved below the lower Bollinger band & 200-days SMA, which indicates bearish sentiments for the near term. A momentum indicator RSI & MACD suggested a negative crossover on the daily chart, which pointed-out further bearishness in the index. At present, Nifty has immediate support around 16,150/16,000 levels while on upside resistance around 16,450 levels. On the other hand, Bank Nifty has support at 34,600 levels while resistance at 36,000 levels, said Gupta.
Global stock markets bleed
Stock markets are bleeding across the world after Russia attacked several sites Ukraine's capital city Kyiv. Keeping aside the international condemnation and sanctions, Russian President Vladimir Putin has ordered military operations in Ukraine.
The pan-European STOXX 600 index tumbled 2.9 percent, marking a correction, or a 10 percent decline from its January record high. The benchmark was set for its worst selloff in a month. The German DAX sank 3.6 percent to its lowest in nearly a year, leading declines among regional indexes on concerns over the country's heavy reliance on energy supplies from Russia. A surge in oil prices helped limit losses on UK's commodity-heavy FTSE 100. The index was down 2.5 percent.
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd said, "Markets will behave like a wild animal but we suspect, any weak rebound attempt will again be swept aside by bears at around Nifty’s 16700-16900 zone. So, selling on strength will continue to be the preferred trading strategy."
Oil prices soar
Oil prices soared past the $100 per barrel mark for the first time since 2014. This is expected to have huge implications in India's economic growth.
Europe's oil & gas index fell 2.2 percent even as oil prices surged about 6 percent, pushing Brent crude past $100 a barrel for the first time since 2014. The sector remains Europe's top performer this year with a 6 percent gain.
Finance Minister Nirmala Sitharaman said earlier this week that the Ukraine-Russia crisis and high oil prices pose threat to India's financial stability.
Russian currency plunges to a record low
The Central Bank of Russia suspended trading in the foreign-exchange markets on Thursday. The ruble plunged to a record low after President Vladimir Putin ordered his country's military to conduct a special operation in the Donbass region, RT reported.
The Russian currency dropped 6 percent to 86 rubles per US dollar early Thursday - the lowest level on record. Both Moscow's and St Petersburg's stock exchanges suspended all trade in rubles after quotes reached the trading band limits set by the exchange itself.
Against the euro, the rouble lost 3.2 percent to trade at 94.55 , earlier hitting an all-time low of 101.03 on the interbank market. For the first time since 2014, when Russia annexed Crimea from Ukraine, the central bank said it will support the rouble with foreign currency interventions to shore up financial stability.
The rouble bounced off all-time lows on Thursday as the central bank announced FX interventions after President Vladimir Putin ordered Russian forces to invade Ukraine, a move expected to trigger new harsh sanctions against Moscow.
The central bank could ease the pressure on the rouble as its gold and forex reserves are close record highs of near $640 billion, analysts said Reuters said.
Russia is currently holding vast gold and foreign-exchange reserves worth over $600 billion that could be used to prop up the rapidly depreciating national currency if required, the report said.
Moody's raise Indian GDP growth forecast
Moody's Investors Service has raised its GDP growth forecast for India for the current calendar year to 9.5 percent from 7 percent, citing a stronger-than-expected economic recovery from the national lockdown of 2020 and the second wave of the COVID-19 pandemic in mid-2021.
(With inputs from Reuters)
