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NSE Intra-day chart (07 March 2022)
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Market Commentary 08 March 2022
Benchmarks likely to get negative start amid weak global cues

 

Indian equity benchmarks suffered sharp losses for the fourth straight day in a row, dragging the Sensex and Nifty below critical levels of 52,900 and 15,900, respectively. Concerns about the Russia-Ukraine conflict, as well as rising crude oil prices, drove the markets lower.  The markets started the week with a huge downside gap, as sentiments got hit as Jayanth R Varma, who is a member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), has said the Russia-Ukraine conflict is likely to have adverse effects on both economic growth as well as inflation and policy makers must remain alert and ready to respond rapidly to the emerging situation. The mood on the street got impacted as a private report lowered India's economy growth forecast to 7.8 per cent for 2022 due to the nation's exports being impacted by the Russia-Ukraine war and spiking oil prices causing ripple effects. It said rupee is likely to further depreciate against US dollar while soaring commodity prices will push inflation up. Key indices continued to trade in deep red in the late afternoon session as overseas investors withdrew as much as Rs 17,537 crore from the Indian markets in just three trading sessions of March as investors' sentiment was dented by the uncertainty caused by the Russia-Ukraine war and rising crude oil prices. Market participants also took a note of Credit ratings agency Crisil's report stated that the Reserve Bank of India's (RBI) revised norms led to a 1.50 per cent jump in the non-banking finance companies' (NBFCs) reported gross non-performing assets (GNPAs) to 6.80 per cent in the December quarter (Q3FY22). Meanwhile, the Goods and Services Tax (GST) Council in its next meeting may look at raising the lowest tax slab to 8 per cent, from 5 per cent, and prune the exemption list in the GST regime as it looks to increase revenues and do away with states' dependence on Centre for compensation. Finally, the BSE Sensex fell 1491.06 points or 2.74% to 52,842.75 and the CNX Nifty was down by 382.20 points or 2.35% to 15,863.15.

 

The US markets ended deeply in red on Monday, extending the downward move seen over the previous sessions, as investors grew increasingly concerned higher energy prices stemming from the Russia-Ukraine conflict would slow the economy and raise inflation. The continued jump in oil prices comes as Secretary of State Antony Blinken said that the US and European partners are in active discussions about banning the import of Russian oil in response to the country's invasion of Ukraine. The increase in gas prices is likely to weigh on consumers, who are already grappling with higher prices due to elevated inflation. This all comes as the Federal Reserve prepares to raise interest rates by at least a quarter point at its monetary policy meeting next week. On the sectoral front, airline stocks turned in some of the market's worst performances on the day amid concerns about higher fuel costs, with the NYSE Arca Airline Index plummeting by 13.3 percent to its lowest closing level in well over a year. Substantial weakness was also visible among housing stocks, as reflected by the 5.2 percent nosedive by the Philadelphia Housing Sector Index. Semiconductor stocks also showed a significant move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 4.9 percent. Financial, tobacco, chemical and retail stocks also saw considerable weakness, moving lower along with most of the other major sectors.

 

Crude oil futures ended higher on Monday, extending their recent sessions' rally, lifted by concerns over global oil supplies amid talks the US and its Western allies are likely to impose a ban on Russian oil. Secretary of State Antony Blinken said the US and its allies are considering banning Russian oil and natural gas imports. Uncertainty about a revival of Iran's nuclear deal with world powers also contributed to supply concerns and the resultant surge in oil prices to 14-year highs. Benchmark crude oil futures for April delivery rose $3.72 or 3.2 percent to settle at $119.40 a barrel on the New York Mercantile Exchange. Brent crude for May delivery climbed $5.1 or 4.3 percent to settle at $123.21 a barrel on London's Intercontinental Exchange.

 

Rupee ended at lifetime low on Monday as a sharp surge in global crude oil prices to above $130 threatened to push up imported inflation and widen the country's trade and current account deficits. The rupee declined against the US dollar as intensifying geopolitical risks due to the Russia-Ukraine conflict pushed investors to the greenback's safe-haven appeal. Besides, sustained foreign fund outflows and a lacklustre trend in domestic equities also weighed investor sentiment. Sentiments were fragile as a private report lowered India's economy growth forecast to 7.8 per cent for 2022 due to the nation's exports being impacted by the Russia-Ukraine war and spiking oil prices causing ripple effects. It said rupee is likely to further depreciate against US dollar while soaring commodity prices will push inflation up. On the global front, pound roared to another 5-1/2 year high versus the euro but dropped to its weakest since December 2020 against the dollar, as another volatile session sent investors to buy dollars. Finally, the rupee ended at 77.10 (Provisional), weaker by 93 paise from its previous close of 76.17 on Friday.

 

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 5995.80 crore against gross selling of Rs 13494.42 crore, while in the debt segment, the gross purchase was of Rs 315.03 crore against gross sales of Rs 1443.51 crore. Besides, in the hybrid segment, the gross buying was of Rs 32.75 crore against gross selling of Rs 5.31 crore.

 

The US markets ended in red on Monday as the prospect of a ban on oil imports from Russia sent crude prices soaring and fueled concerns about rising inflation. Asian markets are trading mostly lower on Tuesday as Ukraine and Russia fail to reach a deal on creating humanitarian corridors from affected cities. Indian markets suffered sharp losses for the fourth day in a row on Monday as crude oil prices surged past the $130 a barrel mark amid Russia-Ukraine tensions. Today, domestic indices are likely to continue their losing streak with negative start as investors continue to track global developments around the Russia-Ukraine war and the US stance on any possible bans on Russia's oil and gas. Traders will be concerned with report that Petrol and diesel prices are likely to be hiked this week as oil companies prepare to pare losses accumulated from keeping rates steady for over four months in the run-up to assembly elections in five states, including UP, despite international oil prices jumping to a 13-year high of $140 per barrel. Some cautiousness may also come as rating agency Icra said the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs. However, some support may come with Commerce and Industry Minister Piyush Goyal's statement that goods exports will exceed the ambitious target set for the current fiscal and touch $410 billion, despite the supply-side disruptions caused by the Russia-Ukraine conflict. Separately, he said the budget announcements and steps like production linked incentive (PLI) scheme are efforts in making the country self-sufficient and achieve sustainable development. He also said India is hoping to use its livestock base to produce energy in the days to come. Traders may take note of report that Union Finance Minister Nirmala Sitharaman said the Union Budget for 2022-23, which she had presented, stands for continuity to provide a tax predictable regime and a vision for the next 25 years. She added that the budget also makes sure that the country is adequately endowed to celebrate when it attains 100 years of independence. Sugar industry stocks will be in focus as trade body AISTA said Indian mills have signed sugar export deals for supply of 62 lakh tonnes so far in the current 2021-22 marketing year that started from October 1.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

15,863.15

15,734.86

15,968.01

BSE Sensex

52,842.75

52,405.27

53,242.04

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Oil & Natural Gas Corporation

1,325.38

187.00

172.80

195.50

ITC

452.58

225.95

221.70

228.60

Tata Motors

448.36

395.75

388.25

402.50

Coal India

416.42

188.60

182.86

193.16

State Bank of India

337.20

441.15

431.75

452.25

 

  • Coal India is planning to become a net-zero carbon emitter in three to four years.  
  • Bharti Airtel and Axis Bank have entered into a strategic partnership to strengthen the growth of India's digital ecosystem through a range of financial solutions. 
  • L&T has launched L&T-SuFin, an integrated e-commerce platform for B2B industrial products and services. 
  • Tech Mahindra has entered into a collaboration with APPSLINK, a Global award-winning Oracle Partner specialising in Oracle HCM and ERP implementations.
News Analysis