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Benchmarks stage sharp recovery, end with modest losses, Nifty holds 17,000 mark

Published on Feb 22, 2022 16:34

The domestic equity benchmarks recovered from steep losses in early trade and ended with modest cuts on Tuesday. The Nifty closed near the 17,100 mark after hitting the day`s low of 16,843.80 in initial deals. Selling was broad based with metals, PSU banks and realty shares declining the most.

The S&P BSE Sensex fell 382.91 points or 0.66% to 57,300.68. The Nifty 50 index lost 114.45 points or 0.67% to 17,092.20.

TCS (down 3.59%), SBI (down 2.67%), HDFC Bank (down 0.68%) and Reliance Industries (down 0.50%) were major drags.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, surged 16.41% to 26.66.

Escalating geopolitical tensions between Russia and Ukraine weighed on the sentiment. There are concerns that rising tensions in Eastern Europe will boost crude oil prices and could spark global supply chain disruption, resulting in rising input costs. Thousands of U.S. and European companies do business with suppliers in Russia and Ukraine. Many of them could be at risk during a prolonged military conflict.

In the broader market, the S&P BSE Mid-Cap index fell 0.70% while the S&P BSE Small-Cap index slipped 1.62%.

The market breadth was weak. On the BSE, 689 shares rose and 2667 shares fell. A total of 86 shares were unchanged.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose to 6.749% as compared with 6.693% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.86, compared with its close of 74.55 during the previous trading session.

MCX Gold futures for 5 April 2022 settlement rose 0.44% to Rs 50,300.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was trading flat at 96.04.

In the commodities market, Brent crude for April 2022 settlement jumped $5.46 or 5.84% to $99 a barrel.

Global Stocks:

The Dow Jones index futures sharply pared losses and were down 49 points. US markets were closed for a holiday on Monday.

Most shares in Europe and Asia declined on Tuesday, as traders continue to monitor brewing tensions between Russia and Ukraine.

On the data front, Germany`s IFO business climate index rose to 98.9 in February from 96 in January despite the situation in Ukraine, though the research institute said German businesses already afflicted by supply bottlenecks will see a drag.

Russia-Ukraine Crisis:

Russian President Vladimir Putin ordered troops into two separatist regions of eastern Ukraine after announcing Monday evening that he would recognize their independence.

The two self-proclaimed rebel republics of Donetsk and Luhansk, whose independence Moscow recognised on Monday, are situated in the rust belt in eastern Ukraine, and escaped Kyiv`s control in 2014. The conflict in the separatist regions began in 2014, when rebels loyal to Russia seized government buildings in Donetsk and Luhansk, beginning a long trench war with Ukrainian forces.

"I believe it is necessary to take a long overdue decision, to immediately recognise the independence and sovereignty of the Donetsk People`s Republic and the Lugansk People`s Republic," he said, before state television showed Putin signing mutual aid agreements with rebel leaders in the Kremlin.

US and European officials condemned the moves, but a Biden administration official reportedly said Russia`s military action did not as yet constitute an invasion that would trigger a broader sanctions package.

Buzzing Indian Segment:

The Nifty Media index fell 3.30% to 2,035.20. The index has corrected 7.83% in five straight sessions.

Zee Entertainment Enterprises (down 5.35%), TV18 Broadcast (down 5.28%), Network18 Media & Investments (down 4.99%), Hathway Cable & Datacom (down 4.74%), DishTV India (down 4.4%), Saregama India (down 4.07%), Sun TV Network (down 1.99%), INOX Leisure (down 1.54%) and Nazara Technologies (down 1.48%) tumbled.

Stocks in Spotlight:

Hindalco Industries rose 0.67%. The company`s wholly owned subsidiary Novelis will invest approximately Rs 372.74 crore ($50 million) to build a recycling centre with annual casting capacity of 100 kilotonnes of low-carbon sheet ingot at its Ulsan Aluminium joint venture in South Korea. It expects the recycling centre to reduce the company`s carbon emissions by more than 420,000 tonnes each year.

Adani Enterprises fell 0.95%. The Adani Group announced it has signed a non-binding Memorandum of Understanding (MoU) with Ballard Power Systems to evaluate a joint investment case for the commercialization of hydrogen fuel cells in various mobility and industrial applications in India. Under the MoU, both parties will examine various options to cooperate, including potential collaboration for fuel cell manufacturing in India.

Vedanta declined 1.03%. The company announced that it has made an oil discovery in its exploratory well in Rajasthan`s Barmer district. The company holds 100% participating interest in the block.

ISGEC Heavy Engineering tumbled 3.12%. The company said that it has commissioned its largest biomass boilers for a bio ethanol project in Thailand for GKBI through an EPC company, Sbang Corp, Thailand.

NHPC added 0.35%. The company said that the Sewa-ll Power Station (3 x 40 MW), Mashka (UT of J&K), has successfully restarted power generation from 21 February 2022. The power station under complete shutdown w.e.f. 25 September 2020 due to damage of head race tunnel (HRT).

Marksans Pharma declined 2.42%. The company announced that UK MHRA has granted market authorisation to the its wholly owned subsidiary Bell Sons & Co. (Druggists) for Bells Healthcare All in One Oral Solution. Therapeutic use of the product is for short term symptomatic relief of colds, chills and influenza including chesty coughs. This is the first generic approval by UK MHRA for the product.

Ducon Infratechnologies jumped 5% after the company said its board will consider bonus share issue on 25 February 2022.

7NR Retail rose 8.26% to Rs 19 after the company said its board has approved a 10-for-1 stock split.

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