Post Market views - March 2, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equity markets crash as geopolitical situation worsens due to the Russia-Ukraine crisis. Nifty decreased by 1.1%. Nifty MidCap ended relatively flat while Nifty SmallCap was up by 0.5%. Most sectoral indices ended in red except Nifty Media (+1.9%) and Nifty Metal (+4%). Nifty Auto decreased the most at 3% followed by Nifty Pvt Bank (-2.4%) and Nifty Fin Service (-2.3%).

U.S equities witnessed a decline as the Russia-Ukraine crisis intensified further. The markets were also impacted due to the Western sanctions on Moscow. The Dow Jones fell 1.76%. The S&P 500 lost 1.55% while the Nasdaq dropped 1.59%. The 10-year U.S. Treasury index slid to 1.7%. Biden in his speech, seek to unite Americans in solidarity with Ukraine, while also focusing on economic agenda, including reintroducing elements of his stalled Build Back Better program. The war in Ukraine and high inflation are two of the biggest challenges, in addition to the ongoing coronavirus pandemic.

The European Union wants to cut all links between Russia and the global financial system. The madness seen last week may have subsided, but the participants are still having anxiety attacks over the Ukraine issue. 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 11% from its peak of ~18,600. Even if we assume market recover by 20% 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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