Informist, Monday, Feb 14, 2022

By Joe Milton

MUMBAI – The uncertainty over the possible Russian invasion of Ukraine and retaliatory economic sanctions from the US caused havoc in equity markets across the world today, with domestic equity indices witnessing the biggest sell-off in 10 months. 

Russia is one of the largest oil producers in the world, hence stiff economic sanctions would further disrupt the already skewed demand-supply mismatch. This prospect led to a sharp spike in the price of Brent crude oil, which rose to a seven-year high of $96.16 per barrel. 

In an already high inflationary environment, the spike in the Brent crude oil prices stoked fear among investors, and they flocked to safer assets like US bonds, gold, and US dollar with riskier assets like equities left in peril.

Domestic equity indices witnessed a gap-down opening and intraday bounces were sold into at every opportunity. With lack of support from domestic institutional investors too, the Nifty 50 index witnessed a steep fall and closed 3.1% lower at 16842.80 points. 

Inflows from domestic institutional investors may also reduce ahead of the most awaited mega-initial public offering from Life Insurance Corp of India, amid relentless selling by foreign institutional investors, said Santosh Meena, head of research, Swastika Investmart. 

The 50-stock Nifty touched an intraday high and low of 17099.50 points and 16809.65 points respectively. Analysts expect the Nifty 50 index to find support around its 200-day simple moving average of 16800 points, however, more selling pressure may drag the Nifty 50 towards the lowest level touched in December, which is around 16400 points. 

The BSE-Sensex ended about 3% lower at 56405.84 points, after touching an intraday high and low of 57191.91 and 56295.70 points respectively. 

The sharp sell-off triggered more bearish bets in the options segment of Nifty 50, which pushed the market's fear gauge India VIX index beyond 23 points. The index closed at 22.9775 points, up 23%. 

The high India VIX index is here to stay for the next few more weeks, and once the index cools off below 18 points level, headline indices may gain good traction on the upside, said Nirav Harish Chheda, senior technical and derivative analyst at Nirmal Bang Equities.  

Since the Nifty 50 index is currently trading at the lower end of the consolidation zone of 16800-17600 points, analysts said the correction offers a good opportunity for long term investors to accumulate large-cap stocks. 

Among sectors, the sell-off by foreign investors was evident from the sharp fall in financial stocks like Housing Development Finance Corp, HDFC Bank, Kotak Mahindra Bank, and ICICI Bank. 

The Nifty Bank index broke multiple support levels and closed 4.2% lower at 36908.55 points, after touching the day's low of 36828.05 points. The index is currently near its 200-day simple moving average of around 36500 points. Falling below will lead to this further weakness which may take the index towards 36000 points. 

The risk-off sentiment among investors led to sell-off in shares of metal companies, and they were the worst hit among sectoral indices, with the Nifty Metal index down 5.1%. 

On the stock-specific front, Tata Consultancy Services was the sole gainer among Nifty 50 constituents as investors bought the stock to benefit from the buyback gains. The board has approved the buyback of shares at 4,500 rupees apiece with Feb 23 as the record date. Today, the stock closed 1.1% higher at 3733.75 rupees.

The sell-off was more intense in the broader market with all the small-cap and mid-cap indices in NSE ending 3-5% lower. The overall market breadth was extremely weak with 8 stocks declining for each that advanced. 

* Among Nifty 50 stocks, 1 rose and 49 fell

* Among Sensex stocks, 1 rose and 29 fell

* On the NSE, 245 stocks rose, 1,858 fell and 31 were unchanged

* On the BSE, 567 stocks rose, 2,984 fell and 119 were unchanged

* Nifty Pharma: Down 1.91%; Nifty Auto: Down 3.86%; Nifty IT: Down 1.45%

BSE                                              National Stock Exchange
Sensex: 56405.84, down 1747.08 pts (3.00%)       Nifty 50: 16842.80, down 531.95 pts (3.06%) 

S&P BSE Sensitive Index                          Nifty 50
Lifetime High: 62245.43 (Oct 19)                : Lifetime High: 18604.45 (Oct 19)
Record Close High: 61765.59 (Oct 18)            : Record Close High: 18477.05 (Oct 18)

2022 1st day close: 59183.22 (Jan 3)            : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 61308.91 (Jan 17)            : 2022 Closing High: 18308.10 (Jan 17) 
2022 Closing Low: 56405.84 (Feb 14)             : 2022 Closing Low: 16842.80 (Feb 14)
2022 High (intraday): 61385.48 (Jan 17)         : 2022 High (intraday): 18321.55 (Jan 17)

2022 Low (intraday): 56295.70 (Feb 14)          : 2022 Low (intraday): 16809.65 (Feb 14)
2021 Closing High: 61305.95 (Oct 14)            : 2021 Closing High: 18338.55 (Oct 14) 
2021 Closing Low: 46285.77 (Jan 29)             : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14)         : 2021 High (intraday): 18350.75 (Oct 14)
2021 Low (intraday): 46160.46 (Jan 29)          : 2021 Low (intraday): 13596.75 (Jan 29)

2020 Closing High: 47751.33 (Dec 31)            : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23)             : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31)         : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24)          : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20)         : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19)          : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28))         : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23)           : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26)         : 2017 High(intraday): 10515.10 (Dec 26)

End

Edited by Pranav S. Joshi

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