Post Market views - March 25, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities.

Domestic equities closed lower despite a strong session in the U.S markets. Investors approach cautiously as the Russia-Ukraine crisis enters its second month. Moreover, inspite of oil prices declining slightly, the hike in domestic fuel prices negatively impacted investor sentiment. Nifty fell 0.4%. Nifty MidCap and Nifty SmallCap were down 0.1% and 0.5% respectively. Sectoral indices ended mixed with Nifty Reality and Nifty PSU Bank gaining the most at 1.2% and 0.8% respectively. Nifty IT and Nifty Pharma were the major laggards which dipped 0.9% and 0.7% respectively.

U.S. equities closed higher with S&P 500 gaining 1.4%, Dow Jones added 1% while Nasdaq jumped 1.9%. The investors closely monitored the Russia-Ukraine war scenario whilst also adjusting to the Federal Reserve's plans for a more rigid monetary policy. The yield on 10-year treasury jumped 2 bps to ~2.3%. The U.S will further penalise Russia by expanding sanctions and targeting its parliament and gold reserves. Moreover, Washington is also set to build on its humanitarian assistance by accepting 100,000 Ukrainian refugees and providing an additional $1 billion in food, medicine, water and other supplies.

The Russia-Ukraine conflict and inflationary pressures are assessing the market sentiment. Oil prices continue to be volatile as the markets around the world witness the developments of the war, which is disrupting shipping and air freight. Moreover, the Chinese economy also monitored a recent wave of COVID-19 infections. Market may remain unsteady until the resolution of the Russia-Ukraine crisis. However, over the near-term, war issue and sanctions on Russian products would have high negative bearings on global and Indian equities.

Source : Equity Bulls

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