After opening deeply in red, the benchmarks indices managed to pare most losses and end with modest cuts on Tuesday. The Nifty closed a tad below the 17,100 mark after hitting the day's low of 16,843.80 in early trade. Selling was broad based with IT, metal, banks and FMCG shares declining the most.
As per provisional closing data, the barometer index, the S&P BSE Sensex, fell 382.91 points or 0.66% to 57,300.68. The Nifty 50 index lost 114.45 points or 0.67% to 17,092.20.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, surged 16.41% to 26.66.
Escalating geopolitical tensions between Russia and Ukraine weighed on the sentiment. There are concerns that rising tensions in Eastern Europe will boost crude oil prices and could spark global supply chain disruption, resulting in rising input costs. Thousands of U.S. and European companies do business with suppliers in Russia and Ukraine. Many of them could be at risk during a prolonged military conflict.
In the broader market, the S&P BSE Mid-Cap index fell 0.70% while the S&P BSE Small-Cap index slipped 1.62%.
The market breadth was weak. On the BSE, 692 shares rose and 2662 shares fell. A total of 88 shares were unchanged.
Global Stocks:
Shares in Asia-Pacific declined on Tuesday, with Hong Kong leading losses among the region's major markets.
Markets in Europe declined across the board as global markets were shaken by developments in the Russia-Ukraine crisis.
On the data front, Germany's IFO business climate index rose to 98.9 in February from 96 in January despite the situation in Ukraine, though the research institute said German businesses already afflicted by supply bottlenecks will see a drag.
The Dow Jones index futures were down 305.9 points, indicating a weak opening in the US stocks today. US markets were closed for a holiday on Monday.
Russia-Ukraine Crisis:
Russian President Vladimir Putin ordered troops into two separatist regions of eastern Ukraine after announcing Monday evening that he would recognize their independence.
The two self-proclaimed rebel republics of Donetsk and Luhansk, whose independence Moscow recognised on Monday, are situated in the rust belt in eastern Ukraine, and escaped Kyiv's control in 2014. The conflict in the separatist regions began in 2014, when rebels loyal to Russia seized government buildings in Donetsk and Luhansk, beginning a long trench war with Ukrainian forces.
"I believe it is necessary to take a long overdue decision, to immediately recognise the independence and sovereignty of the Donetsk People's Republic and the Lugansk People's Republic," he said, before state television showed Putin signing mutual aid agreements with rebel leaders in the Kremlin.
US and European officials condemned the moves, but a Biden administration official reportedly said Russia's military action did not as yet constitute an invasion that would trigger a broader sanctions package.
Indian Economy:
Union Minister for Finance & Corporate Affairs Nirmala Sitharaman asked the industry leaders to explore ways to further strengthen their sector and help in the post-pandemic revival of economy.
Addressing a post-budget interaction with various industry leaders in Mumbai, the Finance Minister expressed satisfaction about the resilience displayed by the financial markets even during pandemic times.
Sitharaman urged the market participants to strive for efficiency and transparency to help to channelize the resource for productive investment in the most effective manner.
During her opening remarks, the Finance minister asserted that the government wants a sustained recovery. She highlighted that the budget proposals on infrastructure building are an attempt to create the multiplier effect to help the economy. Stating that technology has helped the government make payments to the affected people during the pandemic, Smt Sitharaman said it is also looking at how digital solutions can be deployed in the education and the farming sectors.
She also said that banks will have to be a lot more customer-friendly not in terms of taking adverse risks, but in how they engage with and serve customers.
During the interaction, various ideas and suggestions related to investor awareness, KYC norms, mutual fund penetration, deepening of corporate bonds, commodity derivatives, and effectiveness of the market system were also discussed in detail.
Buzzing Index:
The Nifty IT index slipped 0.98% to 34,132.95. The index has declined 2.24% in five sessions.
TCS (down 3.68%), HCL Tech (down 1.27%), Wipro (down 1.24%), MindTree (down 0.64%) and Tech Mahindra (down 0.33%) declined.
Larsen & Toubro Infotech (up 2.37%), Mphasis (up 1.93%), L&T Technology Services (up 1.85%), oforge (up 0.55%) and Infosys (up 0.25%) advanced.
Stocks in Spotlight:
Hindalco rose 1.15% to Rs 517.85. The company's wholly owned subsidiary Novelis will invest approximately Rs 372.74 crore ($50 million) to build a recycling centre with annual casting capacity of 100 kilotonnes of low-carbon sheet ingot at its Ulsan Aluminium joint venture in South Korea. It expects the recycling centre to reduce the company's carbon emissions by more than 420,000 tonnes each year.
Adani Enterprises fell 0.74% to Rs 1671.90. The Adani Group announced it has signed a non-binding Memorandum of Understanding (MoU) with Ballard Power Systems to evaluate a joint investment case for the commercialization of hydrogen fuel cells in various mobility and industrial applications in India. Under the MoU, both parties will examine various options to cooperate, including potential collaboration for fuel cell manufacturing in India.
Vedanta declined 1.02% to Rs 350.10. The company announced that it has made an oil discovery in its exploratory well in Rajasthan's Barmer district. The company holds 100% participating interest in the block.
ISGEC Heavy Engineering tumbled 4% to Rs 517.25. The company said that it has commissioned its largest biomass boilers for a bio ethanol project in Thailand for GKBI through an EPC company, Sbang Corp, Thailand.
NHPC added 0.52% to Rs 28.90. The company said that the Sewa-ll Power Station (3 x 40 MW), Mashka (UT of J&K), has successfully restarted power generation from 21 February 2022. The power station under complete shutdown w.e.f. 25 September 2020 due to damage of head race tunnel (HRT).
Marksans Pharma declined 2.32% to Rs 48.50. The company announced that UK MHRA has granted market authorisation to the its wholly owned subsidiary Bell Sons & Co. (Druggists) for Bells Healthcare All in One Oral Solution. Therapeutic use of the product is for short term symptomatic relief of colds, chills and influenza including chesty coughs. This is the first generic approval by UK MHRA for the product.
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