Post Session: Quick Review

Thursday turned out to be a nightmarish day of trade for Indian equity benchmarks with frontline gauges ending below their crucial 54,600 (Sensex) and 16,250 (Nifty) levels, shaving off around five percentage points. Markets made an awful start as traders weighed the impact of Russia Ukraine crisis. Russia has launched a military action targeting the military infrastructure of Ukraine and it may lead to a larger scale invasion of Ukraine with the risk of USA and Europe getting embroiled militarily as well. Markets extended selloff and never looked on recovery mode to end near intraday lows as sentiments remain dented after the price of oil crossed $100 per barrel mark stoking inflation fears in oil importing countries like India. Traders also remain concerned as India Ratings revised downwards its GDP growth forecast for 2021-22 to 8.6 per cent from the consensus 9.2 per cent projected earlier. 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.

Selling was so brutal that none of the stocks on Sensex as well as on Nifty managed to end in green. Also, all the sectors on the BSE sectoral front end up in deep red. Traders shrugged off reports that Moody’s Investors Service raised India's growth forecast to 9.5 per cent for the calendar year 2022 and to 8.4 per cent for the coming fiscal beginning April 1, even as it flagged high oil prices and supply distortions as a drag on growth. 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.

Weakness in global markets with European markets making an unpleasant start and Asian markets ending lower too dampened sentiments amid escalation of the Russia-Ukraine crisis. Ukraine has declared a state of emergency and Moscow has begun evacuating its Kyiv embassy. Back home, oil & gas stocks remained in focus 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. Healthcare industry’s stocks remained in focus 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. 

The BSE Sensex ended at 54529.91, down by 2702.15 points or 4.72% after trading in a range of 54383.20 and 55996.09. All the 30 stocks declining on the index. (Provisional)

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

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. (Provisional)

The top losers on the Sensex were Indusind Bank down by 8.43%, Axis Bank down by 6.34%, Bajaj Finance down by 6.26%, Mahindra & Mahindra down by 6.15% and HDFC Bank down by 6.07%, while there was no stock end up in green on the Sensex. (Provisional)

Meanwhile, India Ratings in its latest report 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. The National Statistical Organisation (NSO), which has forecast 9.2 per cent real GDP growth for the year, will release the second advance estimate of national income on February 27. According to an India Ratings analysis, NSO is likely to peg the FY22 real gross domestic product growth at Rs 147.2 lakh crore.

This translates into a GDP growth rate of 8.6 per cent, down from 9.2 per cent forecast in the first advance estimate released on January 7, 2022. The agency said the major reason for the likely downward revision is the upward revision of FY21 GDP to Rs 135.6 lakh crore in the first revised estimate of national income for FY21, which was released on January 31, 2022. As a result, GDP for FY21 is improved to (-) 6.6 per cent from the provisional estimate of (-)7.3 per cent released on May 31, 2021.

Besides this, the second revised estimate of national income for FY20 stood at 3.7 per cent compared to 4 per cent projected earlier while the third estimate retained FY19 growth at 6.5 per cent. The growth rates of GDP drivers from the demand side namely private final consumption expenditure, government’s final consumption expenditure, gross fixed capital formation have undergone a change due to these revisions, and quarterly GDP growth numbers are also expected to undergo a change this year.

The CNX Nifty ended at 16247.95, down by 815.30 points or 4.78% after trading in a range of 16203.25 and 16705.25. All the 50 stocks declining on the index. (Provisional)

The top losers on Nifty were Tata Motors down by 10.28%, UPL down by 8.10%, Indusind Bank down by 7.89%, Grasim Industries down by 7.51% and JSW Steel down by 7.38%, while there were no stocks remained on gaining side on the Nifty. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 206.23 points or 2.75% to 7,291.95, France’s CAC decreased 251.16 points or 3.70% to 6,529.51 and Germany’s DAX decreased 558.27 points or 3.82% to 14,073.09.

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.