How do you see the stock markets on Friday 04th March, especially in the light of the Russian war situation?

On Thursday, the Nifty ended the day 107 points lower but during the day there were substantial gyrations with only the oil stocks holding up amidst high crude prices. Crude touched as high as $120/bbl and that remains the big risk for the Indian economy. This was best evidenced by the sharp correction in the price of paints companies.

The advance decline ratio continued to be unfavourable at 18:32 even as the VIX tapered slightly lower to 28.3 levels. However, the geopolitical situation continues to be extremely volatile and it remains to be seen if the VIX can really stay under the 30 mark. Oil user industries are all coming under pressure, especially paints and cement.

Foreign investors net sold Rs.6,645 crore in equities while domestic funds and LIC bought Rs.4,799 crore on Thursday. FPIs have now sold $26 billion since Oct-21. Among global markets, the Dow was subdued while the NASDAQ, FTSE, DAX and CAC were all down by more than 200 bps. The SGX Nifty is also down by over 200 bps in early trades on Friday.

Any recovery in the markets looks tough for now with crude at $120/bbl. The shelling of the nuclear power plant in Ukraine will only invite more sanctions on Russia and tighten the global situation. In India, you can expect some aggressive long unwinding as the markets into a 2-day weekend with the global situation still very volatile.