The benchmark indices nosedived on the bourses on February 22. The Sensex was down 984.56 points or 1.71 percent at 56,699.03. The broader Nifty was down 281.20 points or 1.63 percent at 16,925.50. About 254 shares have advanced, 1,932 shares declined, and 48 shares are unchanged.
Except ONGC, Nifty stocks opened in the red. Among major losers were Bajaj Finserv was down (-)4.45 percent, Asian Pains (-)4.-5 percent, Grasim (-)3.27 percent, Titan (-)3.15 percent.
Asian shares down
Shares in Asia-Pacific declined in Tuesday morning trade as tensions surrounding Russia and Ukraine continue to keep investors on edge.
MSCI's broadest index of Asia Pacific shares outside Japan skidded 1.44 percent, dragged down by markets in Hong Kong and mainland China, according to Reuters. Japan's Nikkei shed 2 percent. S&P 500 futures fell 1.5 percent, Nasdaq futures lost 2.2 percent, and the Russian rouble briefly touched an 18-month low in early Asia trade on Tuesday, after Russia's MOEX equity index had fallen 10.5 percent the day before.
Hong Kong-listed Chinese tech stocks fell 2.25 percent, with heavyweights Tencent and Alibaba both hit by speculation about a new wave of regulatory scrutiny.
Sebi approval to 3 IPOs
In spite of all ups and downs in the broader market, strong momentum is seen in India’s IPO market as three companies got SEBI’s approval namely – API Holdings Ltd, the parent company of PharmEasy, Wellness Forever Medicare Ltd and CMR Green Technologies Ltd.
European markets close lower
European markets closed lower on Monday as investors monitored the Russia-Ukraine situation and unexpectedly strong economic data from the euro zone and UK. The pan-European Stoxx 600 index provisionally closed down 1.4 percent. UK’s composite PMI came in at an eight-month high of 60.2 in February, up from 54.2 in January and well above forecasts. IHS Markit’s flash euro area composite PMI (purchasing managers’ index) reading came in at a five-month high of 55.8 in February despite record rises in consumer prices.
US stock-index futures were headed sharply lower Monday evening as Russian President Vladimir Putin ordered the deployment of troops to two separatist areas within Ukraine, after recognizing their independence, a move that some fear puts Ukraine and Russia one step closer to military conflict. Putin described Ukraine as an integral part of Russia's history, with eastern Ukraine made up of ancient Russian lands. It was not immediately clear whether the Russian military action would be regarded by the West as the start of a full-scale invasion.
US markets closed on Monday
Markets in the US were closed in observance of Presidents Day and trade on Tuesday will provide the first opportunity for investors to react to developments in Eastern Europe.
West Texas Intermediate crude for March delivery was trading $2.38, or 2.6 percent, to reach around $92.60 a barrel. Gold prices on Globex were up 0.6 percent, to around $1,912.10 an ounce
The White House issued an executive order restricting investment and trade in those regions, while additional measures — likely sanctions — were expected to be announced Tuesday.
India’s monsoon, which irrigates more than half of the country’s farmland and is critical for economic growth, is likely to be normal this year, according to private forecaster Skymet Weather Services Pvt. This could mark a fourth straight year of normal monsoon.
Crude, gold up
Brent crude futures rose 2 percent to $97.21, touching a new seven-year high on worries Russia's energy exports could get disrupted. Oil prices rose as the Ukraine news exacerbated existing supply concerns that have pushed prices near $100 a barrel. The S&P energy sector has been by far the best performer in 2022, up nearly 22 percent, and one of only two S&P sectors that are positive on the year, Reuters said.
Crude oil prices were also supported by tight supply conditions and rising global oil demand post pandemic, said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. Prices also gained after statement from ministers of Arabian oil-producing nations on Sunday as they gathered in Saudi Arabia. OPEC+ stick to increased 4,00,000 barrel per day output quota on every month as decided earlier and there is no plan to increase productions. Escalating Russia-Ukraine tensions are also supporting global energy prices.
"We expect crude oil prices to remain positive in today’s session and WTI prices continue to hold its support level of $88 a barrel while Brent prices could hold $90 a barrel on a weekly closing basis. Crude oil is having support at $89.40–88.00 and resistance is at $91.60–92.80 in today’s session. In INR terms Crude oil has support at Rs6,719-6,571; while resistance is at Rs6,967–7,067," Kalantri added.
Gold, silver prices slip
Gold and silver prices slipped in the early trading session following news that France President Emmanuel Macron proposed summit talks between Russia and Ukraine. But prices gained in the later evening session after Russia recognizes Luhansk and Donetsk as independent nation. Russian President Putin said that he considered a request by two regions of Ukraine which broke away and declared independent.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd said, "We expect precious metals could show strength in today’s session. Gold has support at $1888-1874, while resistance at $1918-1934 per troy ounce. Silver has support at $23.70-23.30, while resistance is at $24.40-24.70 per troy ounce.
"The rupee gold has support at Rs49,848–49,619, while resistance is at Rs50,223–50,369. Silver has support at Rs63,325- 63,058 while resistance is at Rs63,804–64,016", he said.
Spot gold hit a new six-month top of $1,911.56.
USD-INR Outlook
On February 21, USDINR spot made a gap down opening at 74.50 levels from its previous closing of 74.66 levels. From thereon, it plunged towards 74.35 levels on back of suspected IPO related inflows into the system. However, opportunistic dollar buying by importers as the geo—political risks still lingers pushed the USD-INR spot higher towards the end. In the upcoming session, USD-INR spot is likely to go further lower towards 74.20 levels as markers gear up for LIC IPO. Further, down the line, a meeting between Russia and US foreign ministers is expected this week – a probable ray of hope for the markets.
F&O ban
Escorts, and Punjab National Bank are under the F&O ban on the NSE today (February 22).
(With additional inputs from Reuters)
