The Indian Equity Benchmark managed to recover most of their initial losses in a very volatile session on Tuesday amid rising geopolitical tensions, after Russia ordered troops to two East Ukrainian regions. Financial stocks, IT and oil & gas are the biggest obstacles on both major indices.
Both Sensex and Nifty50 finished the day with a 0.7 percent cutting, after falling more than two percent during the session.
The 30-scrip index closed 382.9 points lower at 57,300.7, replace the recovery of 1,288.7 points below the previous closed. The wider nifty benchmark settled at 17.092.2, down 114.5 points, after sliding to as low as 16,843.8 during the day.
Volatility Gauge Vix – known in the market market as a fear index – soaring
16.4 percent to 26.7, one high high high (February 26, 2021). Analysts estimate volatility also continues towards the end of a futures contract & the monthly option due on Thursday. (Read more in February 22 session)
Crude oil prices jumped more than $ 2 per barrel than worries about supple disorders. The increasing price of crude oil affects emerging markets such as India, which fulfills the lion’s part of its oil demand through imports.
Steve Bryce from Standard Chartered said in an interview to CNBC-TV18 there were fewer crude oils regarding a sign of $ 150 per barrel, and still had to be seen how supportive of Ukraine.
He expects the dollar to weaken forward but it is located that high oil prices will only hurt the economy if they go beyond the $ 150 sign.
Geopolitical tension: Uncertainty on the Russia-Ukraine front ran high on investors’ minds. Moscow’s move drew international condemnation, with US officials saying Washington in coordination with allies was planning to announce new sanctions on Russia.
Rising crude oil prices: Russia is the world’s second largest oil producer. India meets the lion’s share of its oil requirement through imports.
FII outflows: A sustained withdrawal of funds from Indian shares has been one of the key negative factors for Dalal Street. FIIs have so far in 2022 net sold Indian shares worth Rs 52,477 crore ($7 billion), provisional exchange data shows. February could be a fifth straight fund of FII outflows.
Fear of bigger, earlier-than-anticipated rate hikes: Investors globally have been closely monitoring inflation readings from major economies and central bank commetaries to assess the timeline and magnitude of long-impending hikes in interest rates. A number of central bankers are due to speak this week.
Worsening inflation: Surging consumer prices are among the main reasons behind the Fed’s hawkish tone. Businesses across industries have been struggling against rising raw material rates.
High equity valuations: Many experts have time and again flagged expensive valuations of Indian equities.
COVID: Though the worst of the pandemic appears to be behind, investors have been waiting eagerly for signs of recovery from the pandemic lows.
