According to analysts, the crisis due to the Ukraine-Russia war will remain in the limelight in the upcoming few weeks. Moreover, the special energy prices of Russian forces that target fuel facilities and airfields in specific will dominate the stock market.
Learn about it in detail in the following sections.
Analysis of the Market Condition
The index denoting the domestic benchmark experienced high volatility because of the geopolitical tension between Ukraine and Russia. As a result, analysts expect this country’s macroeconomic signals and Russia’s invasion to control the Indian stock market.
While the war between Russia and Ukraine has reached Kyiv, the PMI data for service and manufacturing sectors and announcement of GDP estimates on 28 February 2022 will determine the mood of the market. In addition, the auto companies have also decided to release their monthly sales number at the beginning of the month.
What Do the Experts Say?
Kotak Securities Ltd.’s Head of Equity Research (Retail), Shrikant Chauhan, has recently shared his views with PTI, a news agency. According to him, Indian markets are expected to move in tandem with their global peers next week due to the overall sentiments and the end of the earning season. However, they will still closely observe the Russia-Ukraine crisis. He also stated that market participants would observe a movement in energy prices owing to the current inflation overhang.
But for the near term, experts are expecting a highly volatile market. Additionally, the market will keep looking for other signals due to the prevailing Russia-Ukraine conflict. In short, while the low of 16,200 experienced on Thursday will serve as solid support, traders must stay alert for high volatility.
As per Siddharth Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd., there is a need to stay put. In other words, this is an apt time for investors to improve their portfolio by using the present decline and adding quality blue-chip companies.
Performance of the Stock Market
After falling for seven consecutive days, the Indian equities finally rose on Friday by more than 2% each. This was when the Western sanctions on Russia set out strong measures after it attacked Ukraine.
In addition, global equities also experienced some advancements, but US futures were in decline as troops of Russia pressed towards Kyiv, the capital of Ukraine.
Other places also experienced a rise in the market benchmark, including Paris, London, Shanghai and Tokyo. But there was a fall in Hong Kong in this regard. Russian stocks increased by 15% after Thursday’s fall when the Ukraine invasion began.
In India, Sensex points increased by 1,328.61 or 2.4% to 55,858.52 at the end of the day. At the same time, Nifty rose by 410.40 points to 16,658.40.
Tata Motors Limited, Tata Steel Limited, Coal India Limited, Adani Ports and SEZ Ltd, and IndusInd Bank Limited gained the most on Nifty. In contrast, Nestle India Limited, Britannia Industries Limited and Hindustan Unilever Ltd took the worst hits.
All sectoral indices, including relating to PSU, Metal, Power and Realty indices, gained up to 4 or 6%. In addition, there was a rise of 4% each in Mid Caps and Small Caps.
Effects of Russian Troops Targeting Ukraine’s Fuel Facilities and Airfields
Russia’s attack on Ukraine will rule the markets on a global scale. This includes Putin’s military, mainly targeting Ukraine’s fuel facilities and airfields with energy prices. Moreover, the EU and US sanctions on Russia will also directly impact the sentiment of investors.
The Head of Research (Retail) of HDFC Securities Limited, Deepak Jasani, said that as long as Russia-Ukraine front development is influencing the market directions, commodity inflation and resumption of supply disruption will keep hurting different economies at the same time. Moreover, this is when the companies started recovering post-Omicron.
So, looking at the market’s high uncertainties due to the Ukraine-Russia crisis, analysts advise investors to be on their edge this coming week. Experts advise them to keep an eye on the ups and downs and try to seize the opportunity by adding quality blue-chip companies to their portfolios. However, investors should always check the company’s financials and vision before investing.
For regular updates on the stock market and IPOs, make sure to check our blogs.
Frequently Asked Questions?
What do the economists at the State Bank of India say about India’s GDP?
According to the SBI economists, the GDP of India is likely to grow by 5.8% in the third quarter of the current fiscal year.
What are the key factors that will directly influence the stock market this week?
The essential factors that will set the market tone include the Russia-Ukraine crisis, GDP data, rising crude oil prices, monthly auto sales, and LIC’s IPO.
What is the current price of Brent crude oil?
The current crisis has pushed Brent’s crude oil price above $100, which is the highest of all time in the last seven years.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.