IGI Logo

Registering seventh straight session fall, Indian equity benchmarks witnessed a sharp sell-off and lost nearly 5 percent in Thursday’s session, as escalating tensions between Russia and Ukraine spooked sentiments. Key indices opened in red and stayed in the negative terrain for whole trading session, as traders remain concerned with India Ratings’ report in which it has revised downwards its Gross Domestic Product (GDP) growth forecast for 2021-22 to 8.6 per cent from the consensus 9.2 per cent projected earlier. Traders also took a note of RBI Deputy Governor M D Patra’s statement that India's GDP will be just one per cent above the pre-pandemic level even after the estimated 9.2 per cent growth in FY22, and this factor coupled with comfort on inflation make the RBI to continue with the accommodative monetary policy. Making it clear that India's slide on growth began in 2017, much before the pandemic, Patra said the country has lost up to 15 per cent of output forever, which has resulted in the loss of livelihoods as well.

Key indices continued their free fall during the final hour of trade, as sentiments remained downbeat with Fitch Ratings’ statement that India's economy is rapidly recovering from the pandemic but uncertainties remain around its medium-term debt trajectory. It said financial institutions face an uneven recovery due to lingering asset-quality risks and capital limitations. Some pessimism also came as Foreign Institutional Investors (FII) remained net sellers of domestic stocks on Wednesday. FIIs sold Rs 3,417 crore worth equity. Anxiety persisted over the street, even after Moody's Investors Service has raised growth forecast for India to 9.5 per cent for the calendar year 2022 from 7 per cent and maintained its forecast for 5.5 per cent growth in 2023. It added that this translates into 8.4 per cent and 6.5 per cent in fiscal years 2022-23 and 2023-24, respectively.

On the global front, Asian markets ended deeply in red on Thursday, while European markets were trading lower, as Russia declared war against Ukraine, claiming it is intended to protect civilians. Investors sought shelter in safe-haven assets after Russia launched a military operation in Ukraine in what could be the start of war in Europe over Russia's demands for an end to NATO's eastward expansion.  Back home, Healthcare industry’s stocks were in action as a private report stated that India has the potential to generate a staggering $774 billion revenue in the healthcare sector by 2030. It added with an investment of $217 billion, the country can create 12 million jobs in healthcare and allied sectors, which can impact 1.5 billion lives by 2030. There was some reaction in oil & gas industry stocks as the government data showed India's crude oil production fell to 2,511.66 thousand metric tonnes (TMT) in January 2022, which is 2.40 per cent lower than the output registered during the same month last year and 6.04 per cent lower than the official target for the month.

Finally, the BSE Sensex declined 2702.15 points or 4.72% to 54,529.91 and the CNX Nifty was down by 815.30 points or 4.78% to 16,247.95.

The BSE Sensex touched high and low of 55,996.09 and 54,383.20, respectively. All the 30 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 5.53%, while Small cap index was down by 5.77%.

The top losing sectoral indices on the BSE were Realty down by 7.27%, Telecom down by 6.48%, Auto down by 6.05%, Industrials down by 5.79% and Basic Materials down by 5.65%, while there were no gainers on the BSE sectoral front.

The top losers on the Sensex were Indusind Bank down by 7.88%, Mahindra & Mahindra down by 6.34%, Bajaj Finance down by 6.02%, Axis Bank down by 5.99% and Tech Mahindra down by 5.75%, while there was no gainer on the Sensex.

Meanwhile, RBI Deputy Governor M D Patra has said India's GDP will be just one per cent above the pre-pandemic level even after the estimated 9.2 per cent growth in FY22, and this factor coupled with comfort on inflation make the RBI to continue with the accommodative monetary policy. Making it clear that India's slide on growth began in 2017, much before the pandemic, Patra said the country has lost up to 15 per cent of output forever, which has resulted in the loss of livelihoods as well.

He stated ‘India is in a comfortable position as far as inflation is concerned. And, since that is there, we have the headroom to support growth and we will do so because we are dealing with lost output, lost livelihoods.’ He mentioned that the 6.01 per cent headline inflation in January is the peak level and the same will decline to the RBI's target of four per cent by the December 2021 quarter.

On growth, he said India, which had one of the strictest lockdowns on entering the pandemic in 2020 that led to a nearly one-fourth contraction in the economy in Q1FY21, was the second worst-hit country after Peru. ‘And, if you knock out the fiscal stimulus, India exceeds the depression of Peru. So, we have dug out of the deepest recessions in the world,’ Patra added

The CNX Nifty traded in a range of 16,705.25 and 16,203.25, All the 50 stocks declining on the index.

The top losers on Nifty were Tata Motors down by 10.71%, Indusind Bank down by 8.45%, UPL down by 8.28%, Grasim Industries down by 7.83% and JSW Steel down by 7.27%, while there was no gainer on the Nifty.

European markets were trading lower; UK’s FTSE 100 decreased 185.64 points or 2.48% to 7,312.54, France’s CAC decreased 235.26 points or 3.47% to 6,545.41 and Germany’s DAX decreased 546.87 points or 3.74% to 14,084.49.

Asian markets ended deeply in red on Thursday as Russia declared war against Ukraine, claiming it is intended to protect civilians. Ukraine has declared a state of emergency and Moscow has begun evacuating its Kyiv embassy. Meanwhile, U.S. President Joe Biden has warned the world will hold Russia accountable for the death and destruction due to the unprovoked and unjustified attack on Ukraine and the U.S. and its allies will respond in a united and decisive way. Japanese shares hit a 15-month low as Russia finally invaded Ukraine, firing missiles at several Ukrainian cities and landing troops on Ukraine's south coast.

Above views are of the author and not of the website kindly read disclaimer