Indian equity benchmarks Sensex and Nifty 50 suffered deep losses on Friday amid panic among investors tracking news flow globally over the Russia-Ukraine war.
The BSE Sensex, which had touched as low as 53,888, was still down nearly 900-points at 54,180 level, while the NSE Nifty 50 was seen testing the 16,200-level with a fall of nearly 300 points .
Barring the metal space, all sectors remained in the red in opening deals. The broader markets also weakened with the Nifty Midcap 100 and Smallcap 100 indices falling over a percentage point each.
HDFC Twins, SBI Cards, others hit 52-week low
Hero MotoCorp, Ashok Leyland, Max Financial, ICICI Lombard, Lupine, City Union Bank, Edelweiss Financial, Shree Cement, Britannia, Motherson, Aarti Drugs, Apollo Tyres, Rane Brakes, AIA Engineering are among the top gainers in 52-week lows. and Indigo Paints.
Top Reasons to Run a Selloff on Friday
Fire at Ukraine’s nuclear power plant
Russian troops stormed Europe’s largest nuclear power plant on Friday, setting a section of a Ukraine facility on fire in an attack by the country’s leader branded “nuclear terror” and saying it could endanger the continent.
“The war and the crude oil boom have completely changed the economic scenario and the market expectations. If the war goes on for a long time, the global economic growth may get affected. In India, both the government and the RBI have reduced the crude oil price to around $ 75 and hence, the budget and monetary policy will have to revise the projections physically. Even if the crude oil price falls and remains around $100, inflation for FY23 will be much higher than the RBI forecast MPC will be forced to raise rates and this will impact the economic recovery,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Geopolitical headwinds rock the market
Geopolitical uncertainties such as high global inflation and a possible rate hike by the US Fed are putting investors on edge. “Global risk-off has resulted from the Russia-Ukraine conflict, with equity markets undergoing recovery and intermittent bouts of high volatility. Uncertainty over the duration and magnitude of the current conflict could leave markets uneasy
And the news is up to the flow,” Motilal Oswal said in his note.
Slowdown witnessed in FMCG sector
NielsenIQ in its quarterly FMCG update said that India’s packaged fast moving consumer goods saw a decline in volumes in urban markets and de-growth in rural India last year. The FMCG (fast-moving consumer goods) sector is bearing the burden of high cost of agri-inputs. This is clearly evident in the suppressed margins of almost all companies.
In 2021, the sector was hit hard by inflationary pressures, forcing companies to aggressively increase prices for consecutive quarters and change their grammar. This resulted in slow growth in rural areas and slowdown in urban markets.
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