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Indian equity benchmarks failed to hold initial gains to end Thursday’s session in red terrain, as investors globally overlooked reassuring comments from the Fed amid nervousness on the Russia-Ukraine war front coupled with surging oil prices. Markets made a positive start as the head of the Federal Reserve Jerome Powell said he supports a traditional rate hike of 0.25 percentage points instead of the bigger rise recommended by some policymakers. Key gauges despite trimming some gains stayed in green terrain as sentiments got a boost as preliminary data released by the commerce ministry stated that India's exports rose by 22.36 per cent to $33.81 billion in February on account of healthy growth in sectors like engineering, petroleum and chemicals, even as the trade deficit widened to $21.19 billion. Some support also came after income tax department stated that it has issued refunds worth over Rs 1.83 lakh crore to more than 2.09 crore taxpayers so far this fiscal. This includes 1.70 crore refunds of the 2020-21 fiscal ended March 31, 2021, amounting to Rs 34,202.31 crore.

However, markets took U-turn and entered into red terrain in second half of the day as traders opted to book profit amid geopolitical conflict between Russia and Ukraine. Soaring crude prices due to supply disruptions from Russian sanctions too dented investors’ sentiment. Brent crude oil price soared past $118 a barrel on Thursday, the highest level in nine years, as escalated Russia-Ukraine conflict and tightened sanctions on Moscow by western countries, led by the United States, created supply and trade disruptions. Traders also remained anxious as exporters’ body FIEO said export cargoes to CIS (Commonwealth of Independent States) countries are impacted due to ongoing war between Russia and Ukraine as no shipping line is willing to take consignments there.

Weakness in European counters too dampened sentiments, as the Ukraine war triggered a dash for commodities that could be in short supply. Investors also remain worried about higher inflation and slowing economic growth. Asian markets ended mostly in green, after the services sector in China continued to expand in February, albeit at a slower rate, the latest survey from Caixin showed on Thursday with a services PMI score of 50.2. That's down from 51.4 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, shares related to restaurants and entertainment parks owners, including multiplexes remained in focus as the Maharashtra government lifted Covid-19 related restrictions, thus allowing them to operate at 100 per cent capacity in 14 out of 36 districts in the state, including Mumbai. There was some reaction in power industry stocks with a private report that India installed a record 10 gigawatt (GW) of solar capacity during calendar year 2021, registering a year-on-year rise of 212 per cent.

Finally, the BSE Sensex fell 366.22 points or 0.66% to 55,102.68 and the CNX Nifty was down by 107.90 points or 0.65% to 16,498.05.

The BSE Sensex touched high and low of 55,996.62 and 54,931.48, respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.64%, while Small cap index was down by 0.35%.

The top gaining sectoral indices on the BSE were Utilities up by 2.40%, Power up by 2.20%, Oil & Gas up by 2.07%, Metal up by 1.33% and IT up by 1.12%, while Auto down by 2.24%, Consumer Discretionary Goods & Services down by 1.36%, Bankex down by 1.28%, Capital Goods down by 1.26% and Consumer Durables down by 1.22% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.34%, Tech Mahindra up by 2.62%, Wipro up by 2.58%, HCL Tech up by 2.08% and ITC up by 1.90%. On the flip side, Ultratech Cement down by 6.47%, Asian Paints down by 5.14%, Dr. Reddy's Lab down by 3.49%, Maruti Suzuki down by 2.76% and Hindustan Unilever down by 2.65% were the top losers.

Meanwhile, the commerce ministry in its preliminary data has indicated that India's exports rose by 22.36 per cent to $33.81 billion in February 2022 on account of healthy growth in sectors like engineering, petroleum and chemicals. Imports during the month too jumped by about 35 per cent to $55 billion, with inbound shipments of petroleum and crude oil surging 66.56 per cent to $15 billion. Trade deficit, difference between imports and exports, widened to $21.19 billion during the month as against $13.12 billion in the same month last year.

India's merchandise export in April 2021-February 2022 was $374.05 billion, an increase of 45.80 per cent over $256.55 billion in April 2020-February 2021. Imports during the 11-month period rose by 59.21 per cent to $550.12 billion. Trade deficit during this period widened to $176.07 billion as against $88.99 billion during April-February 2020-21.

According to the data, gold imports in February dipped by 11.45 per cent to $4.68 billion. Imports of electronic goods rose by about 29 per cent to $6.24 billion. Exports of engineering goods, petroleum and chemicals in February increased by 31.34 per cent, 66.29 per cent and 24.74 per cent to $9.27 billion, $4.1 billion and $2.4 billion, respectively. Pharmaceutical exports, however, slipped by 3.13 per cent to $1.9 billion in February.

The CNX Nifty traded in a range of 16,442.95 and 16,768.95. There were 17 stocks advancing against 32 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were ONGC up by 4.51%, UPL up by 3.51%, Power Grid up by 3.30%, Wipro up by 2.58% and Tech Mahindra up by 2.32%. On the flip side, Ultratech Cement down by 6.54%, Asian Paints down by 5.18%, HDFC Life Insurance down by 5.18%, Shree Cement down by 4.62% and Eicher Motors down by 3.93% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 31.82 points or 0.43% to 7,397.74, France’s CAC shed 18.23 points or 0.28% to 6,479.79 and Germany’s DAX was down by 130.97 points or 0.94% to 13,869.14.

Asian markets ended mostly higher on Thursday, following the broadly positive cues overnight from Wall Street, as Traders were optimistic amid the ongoing talks to diffuse the Russia-Ukraine crisis. Meanwhile, some support also came in after Federal Reserve chairman Jerome Powell said in testimony before Congress that he is inclined to support a 25 basis point rate increase at the upcoming Fed meeting, instead of a 50 bps hike recommended by some board members. Powell's comments came after European Central Bank policymakers this week argued against any drastic shift in monetary policy. Japanese shares advanced as worries eased of aggressive Fed rate hikes.

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