Post Market views - March 7, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equity markets closed lower as the geopolitical scenario continues to worsens due to the Russia-Ukraine crisis. Record high crude oil price after recent sharp run up has further escalated the situation. Nifty fell by 2.3%. Nifty MidCap and Nifty SmallCap was down by 2.3% and 2% respectively. Most sectoral indices ended in red except Nifty Metal (+1.98%). Nifty Reality declined the most at 5.5% followed by Nifty Pvt Bank (-4.6%) and Nifty PSU Bank (-4.5%).

The US equities dropped to extend decline from Thursday and posted a weekly loss. S&P500 and Dow Jones declined by 1.3% each while NASDAQ fell by 2.8%, posted a fourth straight weekly loss. Treasury yields pulled back further as markets piled into safe havens including bonds and gold, the benchmark 10-year yield stood below 1.8%. The risk-off tone Friday came amid reports that the U.S. was considering a ban on Russian crude oil imports, in a move that would further punish Russia for its invasion of Ukraine.

Market may remain volatile due to the Russia-Ukraine crisis. Trend in global equities, the movement of rupee against the dollar and crude oil prices will dictate trend in the near term. The Indian economy is in good shape given the underlying stellar corporate earnings momentum, the cleansed balance sheets, improving asset quality of the banks, levers in place for capex cycle revival and credit off-take, probable manufacturing resurgence given PLI and other government reforms. This coupled with increasing DII participation can boost the markets to new heights once prevailing clouds of uncertainty disappear. However, over near term war issue would have high negative bearings on global equity markets including Indian equities.

Source : Equity Bulls

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