Markets likely to get negative start amid weak global cues

Indian markets suffered sharp losses for the fourth day in a row on Monday as crude oil prices surged past the $130 a barrel mark amid Russia-Ukraine tensions. Today, domestic indices are likely to continue their losing streak with negative start as investors continue to track global developments around the Russia-Ukraine war and the US stance on any possible bans on Russia's oil and gas. Traders will be concerned with report that Petrol and diesel prices are likely to be hiked this week as oil companies prepare to pare losses accumulated from keeping rates steady for over four months in the run-up to assembly elections in five states, including UP, despite international oil prices jumping to a 13-year high of $140 per barrel. Some cautiousness may also come as rating agency Icra said the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs. However, some support may come with Commerce and Industry Minister Piyush Goyal’s statement that goods exports will exceed the ambitious target set for the current fiscal and touch $410 billion, despite the supply-side disruptions caused by the Russia-Ukraine conflict. Separately, he said the budget announcements and steps like production linked incentive (PLI) scheme are efforts in making the country self-sufficient and achieve sustainable development. He also said India is hoping to use its livestock base to produce energy in the days to come. Traders may take note of report that Union Finance Minister Nirmala Sitharaman said the Union Budget for 2022-23, which she had presented, stands for continuity to provide a tax predictable regime and a vision for the next 25 years. She added that the budget also makes sure that the country is adequately endowed to celebrate when it attains 100 years of independence. Sugar industry stocks will be in focus as trade body AISTA said Indian mills have signed sugar export deals for supply of 62 lakh tonnes so far in the current 2021-22 marketing year that started from October 1.

The US markets ended in red on Monday as the prospect of a ban on oil imports from Russia sent crude prices soaring and fueled concerns about rising inflation. Asian markets are trading mostly lower on Tuesday as Ukraine and Russia fail to reach a deal on creating humanitarian corridors from affected cities.

Back home, Indian equity benchmarks suffered sharp losses for the fourth straight day in a row, dragging the Sensex and Nifty below critical levels of 52,900 and 15,900, respectively. Concerns about the Russia-Ukraine conflict, as well as rising crude oil prices, drove the markets lower.  The markets started the week with a huge downside gap, as sentiments got hit as Jayanth R Varma, who is a member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), has said the Russia-Ukraine conflict is likely to have adverse effects on both economic growth as well as inflation and policy makers must remain alert and ready to respond rapidly to the emerging situation. The mood on the street got impacted as a private report lowered India’s economy growth forecast to 7.8 per cent for 2022 due to the nation’s exports being impacted by the Russia-Ukraine war and spiking oil prices causing ripple effects. It said rupee is likely to further depreciate against US dollar while soaring commodity prices will push inflation up. Key indices continued to trade in deep red in the late afternoon session as overseas investors withdrew as much as Rs 17,537 crore from the Indian markets in just three trading sessions of March as investors’ sentiment was dented by the uncertainty caused by the Russia-Ukraine war and rising crude oil prices.  Market participants also took a note of Credit ratings agency Crisil’s report stated that the Reserve Bank of India’s (RBI) revised norms led to a 1.50 per cent jump in the non-banking finance companies’ (NBFCs) reported gross non-performing assets (GNPAs) to 6.80 per cent in the December quarter (Q3FY22). Meanwhile, the Goods and Services Tax (GST) Council in its next meeting may look at raising the lowest tax slab to 8 per cent, from 5 per cent, and prune the exemption list in the GST regime as it looks to increase revenues and do away with states' dependence on Centre for compensation. Finally, the BSE Sensex fell 1491.06 points or 2.74% to 52,842.75 and the CNX Nifty was down by 382.20 points or 2.35% to 15,863.15.