Trends on SGX Nifty indicate a flat start for stock market indices. Indian markets could open flat to mildly higher on Tuesday in line with largely positive Asian markets today and despite sharply higher US markets on Tuesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Nifty will aim to preserve its strength on reports of a pullback of Russian troops from the Ukraine border, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. That said, volatility could be the hallmark until investors are certain that Russia will not invade Ukraine. Focus shifts to the 10-year US Treasury bond yield that has moved up to 2.03 percent. For the day, support is seen at 17,208 and then at 17,057. Expect waterfall of selling now only below 16,811 mark.
Nifty broke a two day losing streak on February 15 and logged the best day in over a year, as markets rebounded from the steep decline over the previous two sessions, as Russia-Ukraine geopolitical tensions eased. At close Nifty was up 3.03 percent or 509.6 points at 17352.5. In the process, Nifty was the best index performer in the Asian region.
Reduction in tensions on the Russia Ukraine front has led to buying interest/short covering in the markets. Nifty filled the downgap made on February 14 and nullified the bearish implications thereof. Advance decline ratio closed much above 1:1. Nifty could now face resistance at 17,455 while 17,214 could be a support.
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Asia Pacific shares up
Shares in Asia-Pacific rose in Wednesday morning trade, as investors react to China’s inflation data. Meanwhile, tensions appeared to ease between Russia and Ukraine, boosting markets. China’s consumer price index for January rose 0.9 percent as compared with a year ago, slightly lower than expectations in a Reuters poll for a 1.0 percent increase. The producer price index for January rose 9.1 percent as compared with a year earlier, against expectations in a Reuters poll for a 9.5 percent increase.
US stocks close higher
US stocks ended sharply higher Tuesday, with all three major benchmarks snapping a three-day losing streak, on signs of an easing of tensions over Ukraine. Stocks rose onTuesday as investors read recent developments in Western Russia as indication of a de-escalation in animosities, even as US President Joe Biden cautioned that an attack by Russia of Ukraine was still seen as imminent. Earlier Interfax reported the Russian Defense Ministry as saying that units of the southern and western districts are returning to base after completing military exercises.
The US January producer-price index showed a 1 percent monthly rise, double the 0.5 percent increase expected by economists. In other data, the New York Fed’s Empire State business conditions index edged up to 3.1 in February, after a surprise negative 0.7 reading in January. Economists had expected a stronger rebound to a reading of 10.
The yield on the US 10-year Treasury note rose 4.9 basis points to 2.044 percent, marking a 52-week high based on 3 p.m. Eastern Time. Oil futures posted a loss of 3.6 percent on Tuesday (to $92.07 a barrel), a day after settling at their highest level in over seven years, as Russia said some troops were returning to their bases after military exercises near the border with Ukraine, easing some fears of an invasion. The threat of an invasion was cited as a reason for the recent jump in crude prices that took both benchmarks near the $100-a-barrel threshold.
Oil prices tumble
Oil prices tumbled more than 3 percent as they retreated from a seven-year high. U.S. crude futures fell $3.39 to settle at $92.07 a barrel, while Brent futures settled down $3.20 at $93.28 a barrel.
Gold prices fall
Precious metals also fell, with gold slipping from a multi-month high and palladium shedding more than 5 percent.US gold futures settled down 0.7 percent at $1,856.20 an ounce.
COMEX gold trades marginally lower near $1853/oz after a 0.7% decline yesterday, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities. Gold has corrected after testing June 2021 highs as Russia’s move to withdraw some troops fueled hopes that tensions may subside and this has led to a shift from safe havens to riskier assets. Rise in bond yields and hopes of Fed’s aggressive rate hikes is also weighing on price. Gold may remain under pressure as market players shift focus to Fed ahead of FOMC minutes later today as the central bank is likely to maintain hawkish stance
Crude
NYMEX crude trades mixed near $92/bbl after a 3.6% decline yesterday, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities. Crude trades mixed as market players assess Russia situation and position for weekly inventory report. Russia’s troop withdrawal has eased supply risks however uncertainty prevails. US inventory report is expected to note a decline in US crude stocks but API report has reported a smaller drop in stocks. Crude may remain sideways ahead of inventory report however general bias may be on the downside unless there is fresh escalation in tensions
Q3 FY'22 GDP expected to grow at 6.2%: ICRA
India's Q3 FY'22 GDP is expected to grow at 6.2 percent on a year-on-year basis due to a broad-based, base effect-led moderation, as per ratings agency ICRA.
The expected YoY growth of the GDP and gross value added (GVA) at basic prices at constant 2011-12 prices in Q3 FY'22 will display a broad-based, base effect-led moderation to 6.2 percent and 6 percent, respectively, it said.
Four stocks under F&O ban
Four stocks - BHEL, Escorts, Indiabulls Housing Finance, and SAIL - are under the F&O ban for February 16.
(With additional inputs from Reuters)
