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Indian markets ended mildly lower on Friday, as investors remained concerned about the Russia-Ukraine conflict and sooner-than-anticipated hikes in key interest rates. Today, markets are likely to start session on a negative note, amid weakness across global markets as investors remained concerned about the Ukraine-Russia conflict. Traders will be concerned with labour ministry’s report that retail inflation for farm workers and rural labourers rose to 5.49 per cent and 5.74 per cent, respectively in January mainly due to higher prices of certain food items. Besides, a private report stated that India's consumer price indexed inflation is expected to moderate in February 2022 from the levels in January. There will be some cautiousness as the RBI data showed the country's foreign exchange reserves declined by $1.763 billion to $630.19 billion in the week ended on February 11. However, some respite may come later in the day as Crisil Research said India's industrial activity is expected to gather pace in the coming months owing to a gradual pick-up in consumption as well as investment demand. It said while there was an improvement in the momentum i.e., sequential or on-month movement of industrial activity in December - likely reflecting some easing of raw material supply disruption - it was not very robust. Some support may also come as revising the outlook on state finances to improving in FY23 from neutral, India Ratings expects the aggregate fiscal deficit of the states to come in at 3.6 per cent of their gross domestic product from 3.5 per cent in FY22 on the back of robust revenue growth. The agency had earlier forecast the fiscal deficit of the states to print in at 4.1 per cent. The upward revision is due to the better-than-expected growth in revenue receipts and higher growth in the nominal GDP in FY22. There will be some buzz in the coal industry stocks as the government plans to implement new technologies and build digital infrastructure to support current and future coal mines operations, a move that would reduce the country's dependency on imports. Telecom companies stocks will be in focus as the government's revenue collection from telecom services will be significantly higher than the projection of Rs 52,806.36 crore made in the union budget after adding the collection from the proposed spectrum auction. There will be some reaction in leather indusrty stocks as Sanjay Leekha Chairman of the Council For Leather Exports (CLE) said the country's leather and footwear exports are expected cross $6 billion (about Rs 44,800 crore) in 2022-23 on account of increasing demand in the US and new markets such as Middle East, Africa and Latin America.

The US markets ended lower on Friday on rising worries over escalating Ukraine-Russia tensions and the prospect of a tightened interest rate hike timeline from the Fed in response to decades-high inflation. Asian markets are trading mostly in red on Monday though investors remained hopeful for a diplomatic solution to the Russia-Ukraine standoff.

Back home, Indian equity benchmarks continued volatile streak for a third straight day and ended marginally lower on Friday as investors assessed developments around the Ukraine crisis and US Federal Reserve's policy tightening. Markets made weak start, as traders remained cautious with Crisil Ratings’ report stated that since the introduction of new asset quality norms last November that brought in shadow banks and housing financiers on par with banks, housing finance companies' gross bad loans have gone up by 70 basis points (bps) even as their portfolio quality has improved. However, key indices trimmed losses and were trading in green in afternoon deals, as traders found some solace with rating agency Icra stating that the government's ambitious production-linked incentive (PLI) scheme will look to unlock manufacturing capacity as well as support in attracting about Rs 4 lakh crore of capital expenditure over the next five years. Some support also came as Finance Minister Nirmala Sitharaman has urged multilateral financial institutions to increase funding especially to low and middle income countries to prepare them to deal with pandemic situations in the future. She said that low income and middle income countries do not have enough resources and need global support to face challenges. But, key gauges failed to hold gains and ended lower as some pessimism remained among trader with SBI's research report- Ecowrap stated that country's gross domestic product (GDP) is likely to grow at 5.8 per cent in the third quarter of fiscal 2022. It stated As per SBI Nowcasting Model, the forecasted GDP growth for Q3 FY22 would be 5.8%, with a downward bias. The full year (FY22) GDP growth is now revised downwards to 8.8% from our earlier estimate of 9.3%. Finally, the BSE Sensex fell 59.04 points or 0.10% to 57,832.97 and the CNX Nifty was down by 28.30 points or 0.16% to 17,276.30.

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