Post Session: Quick Review

Indian equity benchmarks staged decent recovery on Tuesday to end higher. Markets made a cautious start as the ongoing concerns on the Russia-Ukraine conflict coupled with soaring crude oil prices continued to weigh market sentiment. Traders were also cautious as a Crisil report warned that the Russian invasion of Ukraine, and the flurry of punitive sanctions imposed on the former by the US and European nations, have the potential to cull India's imports on one hand and also lead to input cost pressure on downstream companies in India Inc.

Some concern also came as rating agency ICRA in its latest report has said that the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs. Traders also got worried, after Union Revenue Secretary Tarun Bajaj urged the Customs department to be cautious following an increase in drug hauls effected in ports and airports across the country. Noting that the Customs has also been working relentlessly on intelligence, Bajaj said things like gold, drugs, red sanders, and wildlife have been coming to the borders as reflected in a large number of seizures in the past year.

However, in the last hours of the trade, markets cut all of their losses to turn positive, with private report stating that hiring activity witnessed a 31 per cent increase in February as multiple sectors recorded strong growth compared to the previous year. Besides, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the direct impact of the Russia-Ukraine war on Indian credits appears to be limited. Ind-Ra’s initial assessment indicates that the impact would be largely restricted to small entities and those at the lower end of the credit spectrum.

Some support came 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. On the global front, European markets were trading higher as banking stocks found some reprieve after hefty losses in the past sessions. Asian markets ended lower, after the value of overall bank lending in Japan was up 0.4 percent on year in February, the Bank of Japan said on Tuesday - coming in at 580.048 billion yen. That follows the downwardly revised 0.5 percent increase in January (originally 0.6 percent).

The BSE Sensex ended at 53424.09, up by 581.34 points or 1.10% after trading in a range of 52260.82 and 53484.26. There were 24 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.46%, while Small cap index up by 1.33%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.19%, IT up by 2.44%, TECK up by 2.33%, Healthcare up by 1.95% and Capital Goods up by 1.22%, while Metal down by 1.94%, Oil & Gas down by 0.98%, Energy down by 0.29% and Basic Materials down by 0.11% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 3.99%, TCS up by 3.29%, NTPC up by 2.77%, Wipro up by 2.73% and Tech Mahindra up by 2.69%. On the flip side, Tata Steel down by 1.73%, Power Grid Corp down by 0.49%, Titan Co down by 0.32%, Nestle down by 0.25% and Reliance Industries down by 0.15% were the top losers. (Provisional)

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the direct impact of the Russia-Ukraine war on Indian credits appears to be limited. Ind-Ra’s initial assessment indicates that the impact would be largely restricted to small entities and those at the lower end of the credit spectrum.

According to the report, the impact will be more pronounced in few sectors and given the relatively small exposure, it would remain manageable from a credit point of view. The agency is reviewing its portfolio of entities and will take communicate rating actions wherever appropriate. Ind-Ra further said that the entities in the pharma and subsidy-linked sectors, such as fertilisers, are the most exposed. Expressing worries, the agency noted that the increase in commodity prices could result in a stretched working capital cycle for small and medium enterprises (SMEs), thereby weakening their debt servicing ability. Additionally, any material rise in interest rates could increase the EMI burden on borrowers.

As per the report, the non-banking financial institutions have adequately provided towards standard and delinquent assets and also have capital buffers to absorb a rise in credit cost. Hence, Ind-Ra does not expect a substantial impact on their capital buffers, provided the crisis is not prolonged.  On the other hand, Ind-Ra expects commercial vehicle financiers to face some credit deterioration in their borrower segment as borrower’s cash flow gets impacted with an increase in the fuel cost which accounts for up to two-thirds of the operating cost for vehicle operators.

The CNX Nifty ended at 16013.45, up by 150.30 points or 0.95% after trading in a range of 15671.45 and 16028.75. There were 37 stocks advancing against 12 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were Indian Oil up by 4.28%, Sun Pharma up by 3.93%, Tata Consumer Products up by 3.61%, TCS up by 3.30% and Cipla up by 3.02%. On the flip side, Hindalco down by 4.81%, ONGC down by 4.20%, Tata Steel down by 1.73%, Britannia down by 1.26% and JSW Steel down by 1.15% were the top losers. (Provisional)

Asian markets ended lower on Tuesday amid worries about inflation following crude oil's sharp uptick to 14 year high amid fears of a ban on Russian oil by the U.S. and its Western allies. There was no major progress in the peace talks between Ukraine and Russia weighed on sentiment. Meanwhile, the U.S. Federal Reserve is preparing to raise interest rates by at least a quarter point at its monetary policy meeting next week. Chinese stocks tumbled amid concerns over inflation, risks from the Russia-Ukraine war and rising Covid-19 cases in mainland China and Hong Kong. Japanese shares hit a 16-month low amid worries that higher input costs may weigh on profit margins in the near term.