Budget euphoria is slowly fading away on Dalal Street as global headwinds stare in the eye. Geopolitical tensions involving Ukraine and Russia, coupled with fear of easy money drying up amid soaring inflation, are giving a rude reality check to stock market investors. Yesterday, the BSE Sensex plunged over 1,300 points in intra-day trade while the Nifty50 slipped below the 17,150 level. The Nifty 50 and BSE-Sensex tumbled for a third straight day and moved below the highs made on Budget-day.
The indices ended nearly 2% lower at 17,214 and 57,621, respectively. With this, the markets have turned negative for the year, and are down 1 percent YTD.U R Bhat, who is co-founder & director at Alphaniti Fintech, believes markets can fall another 3-5% from here on as an actual clash on the Russian border is not priced in at all. Brent crude prices are already up 16% in a month amid simmering tensions between Russia and NATO over Ukraine. Brent is above $93 per barrel mark but a full-scale war can take it past the $100 per barrel mark, analysts worry. Most analysts, including those at Rabobank International and BofA Securities, see Brent hitting the $125 mark by June 2022. On their part, the benchmark indices – the S&P BSE Sensex and the Nifty50 – have slipped around 3% each in the past month. On the contrary, the Nifty Energy index that comprises upstream players like Reliance Industries and ONGC has outperformed with a rise of nearly 6% as oil prices rose during this period. Going forward, market mavens suggest investors stay stock-specific and tread cautiously in the markets. These global factors will continue to dictate market trends on Tuesday as well. Domestically, investors will track the three-day RBI policy meeting, which will begin later today. That apart, the December quarter result of prominent companies, including Bharti Airtel, Escorts, Indraprastha Gas, IRCTC, and Godrej Consumer products will be on investor radar. Moreover, shares of Adani Wilmar will also debut on the bourses today.