How do you see the stock markets on Wednesday 09th March especially in the light of the US putting a ban on Russian oil?

The big news today is the overnight ban on Russian oil imposed by the US. For now, only the US, Canada and Japan have imposed the ban and Europe participation could hold the key. US oil imports from Russia are a very small part and the same is the case with India. However, oil is the most international commodity and market panic is certain.

On Tuesday, the Nifty gained 150 points with a A/D ratio of 37:13, however, in the light of the Russian oil ban by the US, this could be deceptive. Meanwhile, VIX tapered to 28.59 but the latest US ban on Russian oil and gas could result in a sharp spike in volatility in this week. On Tuesday, the oil stocks and the pharma names were relatively stable.

There has been no let-up in Foreign investor selling with FPIs selling equities worth Rs.8,143 crore and domestic funds buying stocks worth Rs.6,490 crore on Tuesday. Dow and NASDAQ were lower on Tuesday while the European markets were flat to negative. The SGX Nifty is 44 bps higher in early trades on Wednesday, but this could be largely deceptive.

what does this mean for Nifty outlook? The index is down 15% from the peak while damage to individual stocks is much bigger. However, the US ban on Russian oil indicates that things could get compounded for oil. Meanwhile, the million dollar question is how long the Indian government can delay price hikes and avoid the real spectre of inflation.