Trends on SGX Nifty indicate a gap-down opening for the broader index in India. The Indian markets could open sharply lower in line with negative Asian markets today and negative US markets on Wednesday, said Deepak Jasani, Head-Retail, HDFC Securities.
Markets are likely to open weak in tandem with the fall in SGX Nifty as Russia’s decision to move troops into eastern Ukraine continues to favour bear camp. Volatility is likely to be the hallmark of day's trading amid expiry of the February F&O series, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.. Ukraine and inflation are the two wild cards that could even force the RBI to reset its recent dovish policy. For Thursday’s trade, until Nifty’s 17,421 mark is resistance, volatility will be hallmark and the perma-bulls should strictly not assume any intraday strength as light at the end of the tunnel. Expect further waterfall of selling below Nifty 16,811 mark. Please note, the long-term trend will be in danger if Nifty slips below 16,811-16,877 zone, Tapse said.
Indian markets are expected to open on flattish to negative note as suggested by SGX Nifty trading with the loss of 280 points, said Mohit Nigam, Head - PMS, Hem Securities for Thursday February 24. Indian equity benchmarks on Wednesday wiped out all the initial gains and ended marginally lower for the sixth straight day yesterday, dragged by Energy, Capital Goods and Auto stocks and ended in red. Most of the global markets ended higher on Wednesday in cautious trade amid Russia faced mounting pressure and economic sanctions over the Ukraine crisis.
On technical front today Nifty50 may take immediate support and resistance at 16,850 level and 17,300 level respectively. In the case of Bank Nifty 36,900 and 37,600 levels will act as immediate support and resistance, Nigam added.
Nifty closed lower for the sixth consecutive session after volatile trade on February 23, despite most other markets bouncing up. At close, Nifty was down 0.22 percent or 38 points at 17054. This is the longest losing streak for the Nifty in over a year.
Nifty could not hold on to early gains reflecting the sell-on-rise behavior adopted by traders and investors (especially foreigners). However, the advance decline ratio has improved to much above 1:1 taking relief from the positive global markets. Nifty could trade in the 16771-17148 band in the near term.
Textile stocks in focus
Textile industry’s stocks may remain in focus with a report that India's annual textiles exports can rise to $100 billion in the next five years from the current $40 billion.
Microfinance sector stocks may also remain in action as India Ratings and Research in its latest report has revised upwards its outlook on the microfinance sector to 'neutral' from 'negative' for the next financial year (FY23), Nigam said.
Asia-Pacific shares fall
Asia-Pacific shares fell on Thursday as investors continue to watch the escalating situation between Russia and Ukraine.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.6 percent in morning trade, with Australian shares at one point diving nearly 3 percent. In Tokyo, the Nikkei was 1.1 percent lower. Chinese blue chips fell 0.6 percent. "The markets figure Russia will now do what ever it wants given how weak the sanctions were, and are pricing in an invasion," said Ray Attrill, head of FX strategy at National Australia Bank.
US stocks close lower
US stock indexes all closed sharply lower Wednesday, with the Dow industrials narrowly avoiding a slip into correction, as US officials warned that Russian troops were poised to attack Ukraine, raising anxieties among investors, who are also wrangling with changing monetary policy and surging inflation. Ukraine declared a state of emergency.
US stocks took a beating, with the Dow Jones Industrial Average down 1.38 percent to barely above the level that would have confirmed a correction. The MSCI World Index , a leading gauge of equity markets globally, skidded to its lowest level since April 2021.
Analysts feel the stock market just isn’t finished “pricing in” the Russia risk. That’s partly because any further Russian aggression would be met with harsher penalties from the US Biden said as much in his Tuesday briefing, leaving sanctions on oil on the table. So the stock market may still be vulnerable to downward jolts.
The Bank of Korea kept interest rates unchanged at 1.25 percent at its meeting on Thursday. However, it predicted that consumer price inflation will run “substantially above 3 percent for a considerable time.”
Crude futures up
Brent crude futures, which seesawed between sharp rises and falls on Wednesday, resumed a climb toward $100 a barrel on Thursday, adding 1.22 percent to $97.98. West Texas Intermediate rose 1.32 percent to $93.32 per barrel.
Spot gold jumped as much as 0.39 percent to a nearly nine-month high of $1,915 per ounce.
India Ratings pegs GDP growth forecast for 2021-22 to 8.6%
India Ratings has revised downwards its GDP growth forecast for 2021-22 to 8.6 percent from the consensus 9.2 percent projected earlier.
The National Statistical Organisation (NSO), which has forecast 9.2 percent real GDP growth for the year, will release the second advance estimate of national income on Monday.
According to an India Ratings analysis, NSO is likely to peg the FY22 real gross domestic product growth at Rs 147.2 lakh crore.
This translates into a GDP growth rate of 8.6 percent, down from 9.2 percent forecast in the first advance estimate released on January 7, 2022.
The major reason for the likely downward revision is the upward revision of FY21 GDP to Rs 135.6 lakh crore in the first revised estimate of national income for FY21, which was released on January 31, 2022, the agency said.
Three stocks under F&O ban
Three stocks – Indiabulls Housing Finance, Vodafone Idea and Punjab National Bank – are under the F&O ban for February 24.
(With inputs from Reuters)
