In a highly charged week dominated by geopolitical tension between Russia and Ukraine, which turned into a fully blown out armed conflict, the domestic equity benchmarks settled with a 3.5% cut each for the week ended February 25, thanks to a robust bounce back on Friday. Interestingly, the Nifty50 and the Sensex has declined 5% each on Thursday as Russia attacked Ukraine, sending shockwaves to the world community.  

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The broader Nifty ended the week with 3.6% cut, while the Sensex dipped 3.4% for the week ending February 25. This also brings a halt to seven consecutive falls the Indian market has witnessed.  

Meanwhile on Friday, Metal, realty and banking stocks led the recovery as the Nifty ended higher by 2.5% and the Sensex gained 2.4%. The 50-share Nifty saw 47 stocks advancing and 3 declining, while the 30-share Sensex ended with 28 stocks sitting in green and only Hindustan Unilever and Nestle India marginally declining on Friday. Britannia was another stock that ended marginally lower on Nifty50. 

See Zee Business Live TV Streaming Below:

Meanwhile, all broader market and sectoral indices returned back to trading in the green with Nifty midcap and small cap indices gaining of 4.18% and 4.84% respectively in an attempt to recoup Thursday's losses. 

Coal India surged 9%, while Tata Motors, Tata Steel, Adani Ports, IndusInd Bank, Bajaj Finance, Tech Mahindra, Axis Bank, Kotak Bank and TCS were other top gainers on Friday.  

As the market staged a bounceback on Friday after depreciating as much as 5% due to Russia resorting to military offensive against Ukraine, we have collated views of stock market analysts and experts who speak about the today's market performance and provide an insight about how would market behave going forward. 

Nitin Raheja, Executive Director, Head – Discretionary Equities, Julius Baer 

The bounce back in the markets being seen today is a counter to the exaggerated reaction we saw yesterday led by the fears of fully blown out armed conflict between NATO and Russia. It was further compounded by the fact that yesterday was also the monthly FNO expiry.  

However, as it became obvious that NATO countries have no desire for an armed conflict and would rather use the path of sanctions the risk perception has lowered marginally globally.  

From an India perspective, the greater risk comes from the impact of rising geopolitical tensions on crude oil and commodity prices. If crude sustains over $100, it could create a negative economic impact in the form of rising inflation and a deterioration in the current account deficit.  

We, however, believe that some of these factors are more short-term in nature and the current correction is more of a bull market correction, which tends to be in the range of 12-15% on an average. A large part of which has been done till date. Further individual stocks have corrected even more and there is a case for gradually buying into the markets using a bottom-up stock specific approach. 

Chandan Taparia, VP, Analyst-Derivatives, Motilal Oswal Financial Services  

The Nifty index opened positive with gains of around 250 points and headed towards 16750 zones in the initial part of the day. However, it failed to hold at higher zones and remained consolidative in a range of 100 points. It partially filled a previous gap and formed a bullish candle with gains of around 400 points. Now, it has to hold above 16666 zones for an up move towards 16850 and 17000, while on the downside support exists at 16400 and 16200 levels. 

Vinod Nair, Head of Research at Geojit Financial Services

Russia’s Ukraine invasion was a big surprise for the world market, as it was not anticipating a war resulting in a bloodbath on the global bourses. Though the market was volatile initially it was expecting a diplomatic end to the crisis. Crude oil prices rising to $100 per barrel and existing elevated inflation worsened sentiments. As global tension increased, FIIs continued to offload holdings adding to further volatility in Indian equities.

However, the domestic market staged a firm recovery on the final day of the week tracking positive cues from global markets and taking advantage of lower valuations following the massive sell-off in the previous session. Global markets took a breather as the fresh US sanctions did not target Russia’s oil exports nor their access to the Swift global payment network.

 Going ahead investors will continue to remain cautious by keenly watching the developments in the Russia-Ukraine war. In such a volatile market a prudent approach is to have a balanced portfolio with a mix of equity, debt, gold, and cash. It is also a busy week in terms of the release of macroeconomic data points like domestic GDP and Manufacturing & Production PMI data

Rupak De, Senior Technical Analyst at LKP Securities 

The formation of bullish ABCD pattern helped a recovery in Nifty as the benchmark index ended at 410 points above the previous closing. However, Friday’s recovery has found initial resistance at the resistance zone 16700-16750. Going forward, the recovery may continue as long as 16550 is held decisively.  

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)