Millennium Post

Stock markets fall for 1st time in 6 days on Russia-Ukraine war talk

After rising over 583 points in previous five sessions, the Sensex slipped about 173 points lower and ended below the 21,000 mark at 20,946.65, down 0.82 per cent.

Healthcare, IT, Power and Auto shares were the worst hit among 10 sectors that ended in the red out of 12 on BSE. TCS, ICICI Bank and Sun Pharma led 25 scrips in 30-share Sensex down. Dr Reddys and Bhel were the biggest laggards.

The NSE 50-issue CNX Nifty also dropped by 55.50 points, or 0.88 per cent, to close at 6,221.45. In previous five days, the index had risen 185.50 points. The tensions in equity market spilled over to the rupee which slipped past 62-mark versus the US dollar in late trade.

The Russian military mobilisation into Crimea has once again brought the spotlight to deepening risks in Ukraine, ‘reinvigorating debate over how escalating geopolitical conflict’ may impact broader market risk sentiment, said Kevin Gaynor, analyst, Nomura in a client note.

Global stocks tumbled as tension over Russia’s military advance into Ukraine and possible sanctions by Western governments intensified. Oil surged above $104 per barrel on concern Russian supplies could get disrupted. Gold was up 2 per cent overseas on safe haven buying, said analysts.

Asian stocks, barring China, fell. Key benchmark indices in Hong Kong, Singapore, Japan and South Korea fell in 0.44-1.47 per cent range while the one from China rose 0.92 per cent. European markets also were trading weak in early deals.  The UK’s FTSE fell 1.01 per cent, France’s CAC was down 1.78 per cent and Germany’s DAX 2.09 per cent. Jignesh Chaudhary, Head of Research, Veracity Broking Services, said, ‘The geopolitical tension in the Eastern Europe region between Ukraine and Russia is creating a bit of stress in the financial markets across and the world. Its ripple effect is felt in Indian markets too.’

BSE Sensex losers included Dr Reddy’s Lab 2.97 per cent, BHEL 2.81 per cent, Sun Pharma 2.75 per cent, M&M 2.22 per cent, Cipla 1.99 per cent and Sesa Sterlite 1.86 per cent. Wipro 1.86 per cent, Tata Motors 1.53 per cent, Bajaj Auto.

Rupee reacts downward by 29p to end at 62.04 against $

The rupee reacted sharply downwards by 29 paise to close at 62.04 against the greenback following negative local equities amid fresh dollar demand from importers. Firm dollar overseas also weighed on the rupee while continued capital inflows could not able to stem the rupee fall, a forex dealer said.

Escalating tensions between Russia and Ukraine also weighed on the emerging markets, including India. At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 61.95 a dollar from last Friday’s close of 61.75 but tried to recover on initial dollar selling by exporters to a high of 61.83.

However, it fell back on fresh dollar demand from importers and fall in local stocks to a low of 62.09 before settling at 62.04, showing a loss of 29 paise or 0.47 per cent. Last Friday, it had gained 23 paise or 0.37 pct.

The Indian benchmark S&P BSE Sensex today plunged by 173.47 points or 0.82 per cent, snapping five session of gaining string while FIIs picked up shares worth $97.92 mln last Friday, as per Sebi data. The dollar index was up by 0.10 pct against a basket of six major global rivals.

Pramit Brahmbhatt, CEO, Alpari Financial Services, (India) said, ‘Today the rupee depreciated almost 0.4 per cent, taking cues from weak local equity which closed down by over 0.8 per cent. Also the fears of military tensions between Russia and Ukraine are spreading negative sentiments over emerging markets which is dragging them down. The trading range for the rupee is expected to be within 61.50 to 62.50.’

‘Rupee was seen weakening against the US dollar. Initial weakness was mainly attributed to the downbeat figures of GDP and fiscal deficit which were released on Friday. Negative domestic stock markets were also seen putting slight pressure on the rupee. Technically, rupee continues to hold well below the strong resistance level of 61.80,’ said Abhishek Goenka, Founder and CEO, India Forex Advisors.

Forward dollar premium recovered on fresh payments from banks and corporates. The benchmark six-month premium payable in August rose to 259.5-261.5 paise from 257-259 paise last weekend. Far forward contracts maturing in February also improved to 509-511 paise from 504.5-506.5 paise.

The RBI fixed the reference rate for dollar at 61.8605 and for the euro at 85.3085. The rupee fell back against the pound to 103.78 from last close of 103.11, while it declined further to 85.47 per euro from 85.15. It also remained weak to end at 61.27 per 100 Japanese yen from 60.60.
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