Domestic indices trade deeply in red after gap-down opening

Indian equity benchmarks reversed previous session’s gains and yet again resumed their southward journey with gap-down opening on Monday. Domestic indices are trading deeply in red with cut of around 1.30% each in early deals as selling persist in the markets amid concerned over global developments on the Russia-Ukraine war and its impact on the global economy including that of India. Traders were also concerned as domestic traders' body -- the Confederation of All India Traders (CAIT) said the conflict between Russia and Ukraine is expected to hit badly the Indian economy and the trade to a significant extent. Besides, continuing the selling streak for the fifth consecutive month, foreign portfolio investors (FPIs) pulled out as much as Rs 35,506 crore out of the Indian markets in February. Market participants overlooked former vice-chairman of NITI Aayog Arvind Panagariya’s statement that India is poised to grow at 7-8% over the next decade and be the third largest economy by 2030 on the back of four big reforms by the government.

On the global front, most of the Asian markets are trading lower despite broadly positive cues from Wall Street on Friday, amid lingering geopolitical concerns on the escalation of the Russia-Ukraine crisis resulting in sanctions and threats of nuclear deployment. Meanwhile, the Ministry of Economy, Trade and Industry said industrial output in Japan fell a seasonally adjusted 1.3 percent on month in January. Taiwan and Indonesia are closed for Peace Day and Isra Mikraj, respectively. Back home, metal stocks were in focus as Union Steel Minister Ram Chandra Prasad Singh said the consumption of steel will continue to rise due to various programmes and schemes of the government and stressed that a mission to develop the secondary steel sector is in the making.

The BSE Sensex is currently trading at 55121.56, down by 736.96 points or 1.32% after trading in a range of 54833.50 and 55329.46. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.93%, while Small cap index was down by 0.84%.

The few gaining sectoral indices on the BSE were Metal up by 0.99%, Utilities up by 0.05%, PSU up by 0.03%, while Bankex down by 1.74%, Telecom down by 1.48%, FMCG down by 1.42%, Auto down by 1.38%, Consumer discretionary down by 1.38% were the top losing indices on BSE.

The few gainers on the Sensex were Power Grid up by 1.77%, Tata Steel up by 1.19% and Sun Pharma up by 0.31%. On the flip side, Asian Paints down by 2.70%, HDFC Bank down by 2.18%, Dr. Reddy's Lab down by 2.14%, Axis Bank down by 1.91% and Kotak Mahindra Bank down by 1.82% were the top losers.

Meanwhile, domestic traders' body -- The Confederation of All India Traders (CAIT) has said that the conflict between Russia and Ukraine is expected to hit ‘badly’ the Indian economy and the trade to a significant extent. It said the impact will jeopardise efforts to recover the domestic trade from the COVID-19 pandemic.

It further said the expected rise in crude oil will be the crucial and critical factor, which will force the prices to go upward, whereas the expected rise in gold prices will also participate in a hike in the prices of the commodities.

It added that a hike in crude oil will lead to further inflation in petrol and diesel prices, which will lead to overall inflation as the manufacturing and transportation cost of the goods will become more costly. On February 24, 2022, Russia launched a major military offensive in Ukraine, targeting various cities and military installations that had left the world stunned.

The CNX Nifty is currently trading at 16450.55, down by 207.85 points or 1.25% after trading in a range of 16356.30 and 16506.10. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 1.93%, Coal India up by 1.65%, Hindalco up by 1.59%, BPCL up by 1.32% and Tata Steel up by 1.17%. On the flip side, SBI Life Insurance down by 2.91%, Asian Paints down by 2.70%, HDFC Life Insurance down by 2.66%, Britannia Industries down by 2.37% and Eicher Motors down by 2.37% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 69.14 points or 0.26% to 26,407.36, Straits Times plunged 65.68 points or 1.99% to 3,228.79, Hang Seng slipped 314.06 points or 1.38% to 22,453.12 and Shanghai Composite fell 4.97 points or 0.14% to 3,446.44, while KOSPI was up by 2.90 points or 0.11% to 2,679.66.