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Indian equity benchmarks snapped a four-day losing streak to end higher in the volatile session on Tuesday led by strong buying interest in Realty, IT and TECK stocks. Key indices made weak start, as traders remained cautious with rating agency Icra’s statement that the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs. Some cautiousness also came as a Crisil report warned that the Russian invasion of Ukraine, and the flurry of punitive sanctions imposed on the former by the US and European nations, have the potential to cull India's imports on one hand and also lead to input cost pressure on downstream companies in India Inc. Selling further crept in as a private report has downgraded Indian equities from ‘overweight’ to ‘underweight’ citing soaring oil prices that hit a 14-year high of over $140 a barrel in trade on Monday.

However, domestic indices reversed their trend and traded with gains in late afternoon deal, taking support from private report stating that hiring activity witnessed a 31 per cent increase in February as multiple sectors recorded strong growth compared to the previous year. Traders also found some solace with Commerce and Industry Minister Piyush Goyal’s statement that goods exports will exceed the ambitious target set for the current fiscal and touch $410 billion, despite the supply-side disruptions caused by the Russia-Ukraine conflict. Traders also took a note of Credit rating agency, India Ratings and Research (Ind-Ra) report stated that the direct impact of the Russia-Ukraine war on Indian credits appears to be limited. Ind-Ra’s initial assessment indicates that the impact would be largely restricted to small entities and those at the lower end of the credit spectrum.

On the global front, Asian markets ended lower on Tuesday amid worries about inflation and a mounting risk of a global economic slowdown - often called stagflation. There was no major progress in the peace talks between Ukraine and Russia and oil prices rose about 2 percent in Asian trade, weighing on sentiment. European markets were trading mostly in green after reports that the European Union will unveil a plan as soon as this week to jointly issue bonds on a potentially massive scale to finance energy and defense spending as the bloc copes with the fallout from Russia's invasion of Ukraine. Back home, sugar industry stocks were in focus as trade body AISTA said Indian mills have signed sugar export deals for supply of 62 lakh tonnes so far in the current 2021-22 marketing year that started from October 1. Stocks related to Indian diamond industry also were in watch with report stated that sanctions imposed by the United States and European nations on Russia in the wake of its aggression on Ukraine is likely to have a direct impact on the Indian diamond industry at a time when it is on the recovery mode after the pandemic and is aiming at $24 billion revenue in FY22.

Finally, the BSE Sensex rose 581.34 points or 1.10% to 53,424.09 and the CNX Nifty was up by 150.30 points or 0.95% to 16,013.45. 

The BSE Sensex touched high and low of 53,484.26 and 52,260.82, respectively. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.46%, while Small cap index was up by 1.33%.

The top gaining sectoral indices on the BSE were Realty up by 3.19%, IT up by 2.44%, TECK up by 2.33%, Healthcare up by 1.95% and Capital Goods up by 1.22%, while Metal down by 1.94%, Oil & Gas down by 0.98%, Energy down by 0.29% and Basic Materials down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.99%, TCS up by 3.29%, NTPC up by 2.77%, Wipro up by 2.73% and Tech Mahindra up by 2.69%. On the flip side, Tata Steel down by 1.73%, Power Grid Corporation down by 0.49%, Titan Company down by 0.32%, Nestle down by 0.25% and Reliance Industries down by 0.15% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs. However, the tension between the countries provides exports opportunities to the Indian steel players. It noted that sanctions on Russia could open new export opportunities for Indian steel mills in geographies like Europe, the Middle East and the USA, which could face supply shortages in the near term.

According to the report, notwithstanding the input cost pressures, the industry earnings are expected to remain healthy in the next 12 months and its outlook for the industry remains positive. It said the domestic steel demand is also pegged to grow at 7-8 per cent in FY23 on the back of an estimated growth of 11-12 per cent in FY2022, supported by the government's large infrastructure spending plans.

It further said after reporting a steep 65-70 per cent sequential increase in the cost of coking coal in Q3 FY22, a further increase of 15 per cent Q-o-Q (quarter-on-quarter) is expected in the fourth quarter. Though the price of iron ore has moderated somewhat from the highs of Q3, and domestic mills have announced some steel price hikes from late January 2022, these will not be able to entirely compensate for the steep rise in coking coal costs.  

The CNX Nifty traded in a range of 16,028.75 and 15,671.45. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 4.23%, Sun Pharma up by 4.04%, Tata Consumer Product up by 3.81%, Cipla up by 3.52% and TCS up by 3.13%. On the flip side, Hindalco down by 4.59%, ONGC down by 4.41%, Tata Steel down by 2.01%, JSW Steel down by 1.35% and Britannia Industries down by 1.22% were the top losers.

European markets were trading mostly in green; France’s CAC increased 57.37 points or 0.96% to 6,039.64 and Germany’s DAX increased 49.85 points or 0.39% to 12,884.50, while UK’s FTSE 100 decreased 15.95 points or 0.23% to 6,943.53.

Asian markets ended lower on Tuesday amid worries about inflation following crude oil's sharp uptick to 14 year high amid fears of a ban on Russian oil by the U.S. and its Western allies. There was no major progress in the peace talks between Ukraine and Russia weighed on sentiment. Meanwhile, the U.S. Federal Reserve is preparing to raise interest rates by at least a quarter point at its monetary policy meeting next week. Chinese stocks tumbled amid concerns over inflation, risks from the Russia-Ukraine war and rising Covid-19 cases in mainland China and Hong Kong. Japanese shares hit a 16-month low amid worries that higher input costs may weigh on profit margins in the near term.

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