Markets dive again after witnessing some recovery

Markets once again started moving southward despite showing some strength in second part of the day, as traders turned cautious amid geopolitical concern between Russia and Ukraine. Markets showed some strength and recouped some of their losses as traders went for bargain hunting after fundamentally strong stocks witnessed drubbing from recent selloff. However, the recovery proved short-lived and market participants once again opted to sell stake in risky assets in last leg of the trade. The broader indices, the BSE Mid cap index and Small cap index were reel under pressures. The overall market breadth was negative as 2009 shares were declining and 1285 were advancing, while 120 shares were unchanged on the BSE. Traders took note that Reserve Bank Governor Shaktikanta Das underlined the need for an effective communication strategy at the central banks, stressing that 'monetary policy is an art of managing expectations. As monetary policy is an art of managing expectations, central banks have to make continual efforts to shape and anchor market expectations, not just through pronouncements and actions but also through a constant refinement of their communication strategies to ensure the desired societal outcomes.

On the global front, Asian markets were trading mostly in red and European markets were trading lower as Ukraine's nuclear regulator said a fire broke out at a building on the site of the country's biggest nuclear power plant after shelling by Russian forces.

The BSE Sensex is currently trading at 54615.97, down by 486.71 points or 0.88% after trading in a range of 53887.72 and 55013.27. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.83%, while Small cap index was down by 1.09%.

The only gaining sectoral indices on the BSE were IT was up by 0.32%, while Metal down by 2.87%, Consumer Durables down by 2.72%, Auto down by 2.61%, Consumer Discretionary down by 2.55% and Realty was down by 2.43% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 3.64%, ITC up by 2.80%, Ultratech Cement up by 2.13%, Sun Pharma up by 1.91% and Tech Mahindra up by 1.74%. On the flip side, Maruti Suzuki down by 4.44%, Asian Paints down by 4.07%, Titan Company down by 3.99%, Hindustan Unilever down by 3.37% and Bharti Airtel down by 2.45% were the top losers.

Meanwhile, India’s service sector activity improved in the month of February, as COVID-19 cases declined and restrictions were lifted. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 51.8 in February from 51.5 in January. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- also improved to 53.5 in February from 53.0 in January.

The report noted that there was a faster increase in new business inflows to service providers that was nevertheless weaker than seen on average over the survey history. However, international demand for Indian services remained subdued in February, as indicated by a further decline in new business from abroad. Moreover, the rate of reduction was solid and the fastest since last September.

On the inflation front, companies indicated higher operating expenses in February, with chemical, energy, food, fuel, labour, metal, plastic and retail costs reported as the key drivers of inflation. The overall rate of increase was sharp, but eased from January's ten-year high. Charges levied by service providers were revised upwards in February as companies continued to transfer additional cost burdens to clients.

Meanwhile, business confidence strengthened in February, owing to expectations that the pandemic will continue to retreat and that increased focus on customer engagement would bear fruit. That said, the overall degree of optimism was historically muted amid lingering concerns surrounding inflationary pressures and COVID-19.

The CNX Nifty is currently trading at 16343.00, down by 155.05 points or 0.94% after trading in a range of 16133.80 and 16456.00. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 3.76%, ITC up by 2.83%, Ultratech Cement up by 2.29%, Sun Pharma up by 1.89% and Tech Mahindra up by 1.79%. On the flip side, Maruti Suzuki down by 4.28%, Asian Paints down by 4.08%, Titan Company down by 3.98%, Hero MotoCorp down by 3.74% and JSW Steel down by 3.59% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 591.80 points or 2.23% to 25,985.47, Hang Seng decreased 562.05 points or 2.5% to 21,905.29, Taiwan Weighted dropped 197.88 points or 1.1% to 17,736.52, KOSPI fell 33.65 points or 1.22% to 2,713.43, Shanghai Composite declined 33.46 points or 0.96% to 3,447.65 and Straits Times was down by 18.40 points or 0.57% to 3,235.25. On the flip side, Jakarta Composite was up by 59.93 points or 0.87% to 6,928.33.

European markets were trading lower, UK’s FTSE 100 decreased 86.51 points or 1.2% to 7,152.34, France’s CAC decreased 125.04 points or 1.96% to 6,253.33 and Germany’s DAX was down by 268.41 points or 1.96% to 13,429.99.