Post Market Views - Feb 25, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities closed higher following positive global cues as The U.S president Joe Biden announced stringent sanctions against Russia. Nifty increased by 2.5%. Broader markets outperformed the main indices with Nifty Midcap and Nifty Smallcap increasing by 4.2% and 4.8% respectively. All sectoral indices ended in green. Nifty Metal increased the most by 5.7% followed by Nifty Reality (+5.2%) and Nifty Media (+4.8%). US equities opened sharply lower as Russia began its full-scale Ukraine invasion. However, the markets rebounded to close higher as US President Joe Biden unveiled harsh new sanctions against Russia. The Dow Jones increased 0.3%. The S&P 500 index jumped 1.5% while Nasdaq climbed 3.3%. The 10-year yield settled at 1.969%, from 1.976% in the previous day.

The geopolitical pot is boiling. If that is no enough, the Fed's aggressive tone on rate hike is keeping market participants on the edge. The LIC's upcoming IPO is India's biggest ever public listing and it continues to make waves. As the ball gets rolling with mega roadshows to connect with top-notch investors, the IDBI Bank stake sale comes up next on the Centre's check list. As the economy looks to get on to the running track, the ongoing disinvestment process will for sure come as a shot in the arm for the government. The average downside in Indian market is 16-17% in past few wars, while recovery was 23% in 3 months and 34% in 6 months. Now in Russia-Ukrain War, NIFTY is down 12% from its peak of ~18,600. Even if we assume market recover by 23% by end of December 2022, we will get our year-end target of 20,000 on Nifty, which is based on 22x FY24 earnings.

Source : Equity Bulls

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