Sensex Tanks 1,600 pts, Nifty Under 16K as Investors Receive Raw Shock; 10 dots

The bears maintained their dominance on Dalal Street on Monday morning. The escalation of the war between Ukraine and Russia and the rise in oil prices to a decade high have spooked investors. In morning trading, the BSE Sensex extended opening losses and fell to 1,700 points, breaking through the 53,000 mark at around 52,640 levels, while the NSE Nifty50 was 450 points lower at 15,780.

Soaring crude prices

Prospects of the United States and its allies imposing sanctions on Russian crude oil exports lifted Brent to $139 a barrel, its highest level since July 2008. Rising crude oil prices, if holds for an extended period of time, may lead to higher inflation, current account deficit, bond yields and interest rates in India and therefore have an impact on macroeconomic stability.

From India’s perspective, a sharp spike in crude oil prices (Brent crossed the USD 100/barrel mark before falling back) poses major risks on the external balance front and can play the trouble- parties with the assumptions made in the Union Budget for FY23, Motilal Oswal Financial Services said in a recent report. .

Analysts said the odds are higher that this new oil price spike will soon trickle down to domestic fuel prices, after an unofficial freeze, following this week’s election results. They said the government may need to reduce excise duties on diesel and petrol to lessen the impact on consumers.

Oil shock drives Indian rupee to record low

The rupiah hit an all-time low of nearly $77 to the dollar on Monday after crude oil surged further on reports that the United States and its European allies were considering a ban on Russian oil. It was the fourth consecutive session in which the currency weakened.

“The Rupee is expected to depreciate today due to risk aversion in global markets and the rising Dollar. Additionally, rising crude oil prices will continue to put pressure on the Rupee. However, expectations of RBI intervention in the FX markets may prevent further decline in the Rupee. INR in US Dollars (March) is expected to rise further towards 76.70 for the day,” ICICI Direct said in its statement. report.

Investor wealth tumbles by Rs 5.91 Lakh Crore

Investor wealth fell by more than Rs 5.91 lakh crore in morning trading on Monday, following a sharp drop in stocks amid an escalating conflict between Russia and Ukraine.

After first glitch, NSE says indices are updated now

The National Stock Exchange said on Monday that trading across all segments of the exchange had normalized and circulation had resumed across all indices after a technical glitch at the start of trading.

Earlier, the exchange said, “Trading in all segments is operating normally. However, the Nifty and Bank Nifty indices are not broadcast intermittently. The exchange is working to resolve the issue and will keep members informed.”

Fall in rate-sensitive indices

Shares in interest rate-sensitive sectors were under heavy pressure on Monday, with financial stocks including banks, non-bank financial companies (NBFCs), housing finance companies (HFCs), autos and real estate sector down 6% on the National Stock Exchange (NSE) in intraday trading on fears of a reversal in the interest cycle due to rising inflation.

Ashok Leyland, Maruti Suzuki India, Eicher Motors and Mahindra & Mahindra (M&M) of automobiles; Prestige Estates, Sobha and Macrotech Real Estate Developers; Bajaj Finance, ICICI Bank, Mahindra & Mahindra Financial Services and Shriram Transport Finance fell 5-6%.

Paint stocks drop up to 11%

Rising crude prices sent paint stocks down as much as 11% in Monday’s trading session, with Indigo Paints hitting a new 52-week low. Santosh Meena, Head of Research, Swastika Investmart said paint stocks are crashing as there is a double whammy situation for them where boiling crude oil prices are a key challenge as this will reduce the margin because crude is one of the main raw materials for paint companies.

gold price

An escalation of the war by Russia is impacting commodity prices around the world. New sanctions against Russia have also triggered massive increases in gold prices. Stagflation fears have also started to creep in, with concerns over high commodity prices impacting inflation and slowing growth.

Gold reached the key level of $2,000 an ounce on March 7 in international markets as concerns over the Russian-Ukrainian conflict pushed investors into safe-haven assets.

Clever technical insights

On a technical level, the immediate support and resistance in Nifty 50 are 15,700 and 16,500 respectively. The immediate support and resistance in Bank Nifty are 33,500 and 35,100 respectively, Mohit Nigam, Head – PMS, Hem Securities .

What should investors do?

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “The market is slipping into bearish territory. Investors should be careful. There is relative security in the energy sector due to high energy prices, metals due to high world prices, and export segments due to resilient demand and depreciating currency. rupee. Calibrated purchases in very small quantities can be envisaged in the aforementioned segments.”

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