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Indian equity benchmarks extended fall for the third straight session on Friday tracking a weak trend in global equities amid escalating tensions between Russia and Ukraine. Markets made a gap-down opening and stayed in red for whole day, as traders remained cautious with a private report that India's trade and current account deficits are likely to widen, putting pressure on the rupee, as global oil prices surge and the domestic economy reopens from a third wave of the pandemic. Traders were also cautious, as the CBIC cautioned the public against sharing Aadhaar and PAN details without a valid reason or for monetary gains, saying that the information could be misused by fraudsters for GST evasion. However, key gauges recouped some of their losses in afternoon deals, as traders took some support as India’s service sector activity improved in the month of February, as COVID-19 cases declined and restrictions were lifted. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 51.8 in February from 51.5 in January. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- also improved to 53.5 in February from 53.0 in January. But, markets failed to hold recovery and ended lower as some pessimism remained among traders with private report stated that the value of foreign portfolio investors' (FPI) holdings in domestic equities reached $654 billion in three months ended December 2021, a drop of nearly 2 per cent from the preceding quarter.

On the global front, Asian markets ended mostly lower on Friday, while European markets were trading lower as Ukraine's nuclear regulator said a fire broke out at a building on the site of the country's biggest nuclear power plant after shelling by Russian forces. The fire was later put out by Ukrainian forces, and the U.S. energy secretary said there was no indication of elevated radiation levels. Concerns about slowing economic growth and inflationary pressures also remained on investors' radars. Back home, stocks related to aviation industry remained in watch as domestic rating agency ICRA in its latest report has said that the Indian aviation industry is expected to report a net loss of Rs 25,000-26,000 crore this fiscal (FY22). It said elevated aviation turbine fuel (ATF) prices, (which were 68 per cent higher year-on-year basis in 11 months of the ongoing fiscal FY2022) and continued fare caps continue to pose a major challenge for the profitability of the airlines.

Finally, the BSE Sensex fell 768.87 points or 1.40% to 54,333.81 and the CNX Nifty was down by 252.70 points or 1.53% to 16,245.35.

The BSE Sensex touched high and low of 55,013.27 and 53,887.72, respectively. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.36%, while Small cap index was down by 1.64%.

The top losing sectoral indices on the BSE were Auto down by 3.40%, Metal down by 3.35%, Consumer Discretionary down by 3.23%, Consumer Durables down by 3.20% and Realty down by 3.06%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 2.95%, ITC up by 2.78%, Tech Mahindra up by 1.84%, Ultratech Cement up by 1.14% and Sun Pharma up by 1.08%. On the flip side, Titan Company down by 5.05%, Maruti Suzuki down by 4.66%, Asian Paints down by 4.61%, Mahindra & Mahindra down by 3.90% and Hindustan Unilever down by 3.43% were the top losers.

Meanwhile, keen to keep government deficit within stated targets, the finance ministry will from March 15 start daily monitoring of the revenue receipts, including tax collections, as well as expenditure. The move comes against the backdrop of a possible deferment of the initial public offering (IPO) of LIC, which was expected to fetch over Rs 60,000 crore, to the next financial year in view of the ongoing Russia-Ukraine war and its implication on Indian markets.

On the other hand, the government's decision to bring back thousands of Indian students stranded in Ukraine will impose an additional burden on the exchequer. It said the daily monitoring of tax and non-tax revenue collections will help the government in taking timely corrective actions, wherever needed. It noted that the CBDT and CBIC have been asked to report flash figures up to the previous day latest by 12 noon. Besides, other non-tax and disinvestment receipts would have to be reported on a daily basis.

It said that the Controller General of Accounts (CGA) has been asked to provide daily revenue collection and expenditure figures of various ministries between March 15 and March 31 to the expenditure secretary. The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) are the apex bodies responsible for collecting direct and indirect taxes, respectively. Likely deferment of LIC IPO along with additional burden on bringing back Indians stranded in Ukraine will put pressure on the fiscal deficit, which has already been raised in the Revised Estimates (RE) to 6.9 per cent of GDP, from 6.8 per cent estimated earlier.

The government has collected Rs 15.47 lakh crore in net tax revenue, which is 87.7 per cent of the full-fiscal target of Rs 17.65 lakh crore. Similarly, non-tax revenue collections stood at Rs 2.91 lakh crore till January, or 92.9 per cent of the RE target of Rs 3.13 lakh crore. However, the government has raised only Rs 12,423 crore from disinvestments so far this fiscal, against the revised target of Rs 78,000 crore. It has been banking on LIC IPO to meet the target. The government's total expenditure till January-end worked out to be Rs 28.09 lakh crore, as against the RE of Rs 37.70 lakh crore for the entire fiscal.

The CNX Nifty traded in a range of 16,456.00 and 16,133.80. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.88%, ITC up by 2.55%, Tech Mahindra up by 1.98%, BPCL up by 1.11% and Ultratech Cement up by 1.02%. On the flip side, Titan Company down by 5.21%, Maruti Suzuki down by 4.75%, Asian Paints down by 4.45%, Hero MotoCorp down by 4.32% and Tata Motors down by 4.28% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 195.55 points or 2.7% to 7,043.30, France’s CAC decreased 192.71 points or 3.02% to 6,185.66 and Germany’s DAX decreased 399.74 points or 2.92% to 13,298.66.

Asian markets ended mostly lower on Friday, following the broadly negative cues overnight from Wall Street, as Ukraine's nuclear regulator said a fire broke out at a building on the site of the country's biggest nuclear power plant after shelling by Russian forces. Traders also remain worried as the sanctions imposed on Russia along with the subsequent surge in oil prices could derail the economic recovery. Chinese stocks ended lower on worries over the worsening Ukraine crisis and property market uncertainties. Japanese shares fell the most in two weeks as the Russia-Ukraine conflict entered its ninth day.

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