Benchmark equity indices BSE Sensex and NSE Nifty extended their fall for the second straight week after concerns about the Ukraine-Russia conflicts resurfaced. The 30-share Sensex declined 319.95 points, or 0.55 per cent, to 57,832.97 on February 18 against 58,152.92 on February 11. Likewise, the 50-share Nifty index lost 98.45 points, or 0.57 per cent, to 17,276.30 during the same period.
As many as 27 stocks in the Nifty index settled the week in the red. With a fall of 5.82 per cent, Power Grid emerged as the top loser in the index. It was followed by JSW Steel (down 5.74 per cent), UltraTech Cement (down 5.56 per cent), ICICI Bank (down 5.30 per cent) and Cipla (down 5.15 per cent).
Overall, the domestic equity market witnessed a bleak start to the week and tumbled three per cent on Monday following the global sell-off fuelled by escalating tensions between Russia and Ukraine. On Tuesday, Dalal Street witnessed a sharp recovery and recouped all of its initial losses as the report stated that some Russian troops in military districts adjacent to Ukraine are returning to their bases after completing drills. However, markets continued to stay volatile throughout the week as traders remained concerned about uncertainty over Ukraine -Russia tensions.
Commenting on the factors which dragged the market, Yesha Shah, head of equity research, Samco Securities said, “If we were to interpret the possible reasons for the sharp shift in mood, the most touted one is the Fed rate hike, which tends to induce significant FII outflows. Soaring inflation has also been the buzz of the town, which, thankfully, does not appear to be as bad in India. Moving on to geopolitical concerns, market participants’ behaviour is inconsistent with this mounting risk as well. When such uncertainties loom, defensive stocks are generally stockpiled.”
Sectorwise, the BSE Metal index plunged 4.23 per cent. Realty, Healthcare, Power, Oil & Gas, Auto, FMCG, Capital Goods and IT indices declined between 0.15 per cent and 2.75 per cent. Broader indices, including the BSE Midcap and Smallcap, lost 1.98 per cent and 3.29 per cent, respectively, for the week ended February 18.
The forthcoming week is expected to remain volatile again for the domestic equity markets on account of the F&O expiry, which is scheduled to take place on Thursday (February 24). Meanwhile, the trend in investment by foreign institutional investors and the movement of the rupee against the dollar will also be closely watched by the market participants.
With no major cues in sight, traders will be eyeing deposit growth and bank loan growth which is scheduled to be released on February 25.
The value of loans in India increased 8.20 per cent in January of 2022 over the same month in the previous year and the value of deposits in India increased 9.3 per cent year-on-year in the fortnight ending January 14.
Vinod Nair, head of research, Geojit Financial Services said, “As current global cues are forcing global equities to remain unstable, the domestic market is also expected to continue its volatile trend in the coming days.”
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