Dalal Street Corner: Russia-Ukraine tension forces benchmarks to close lower for 5th session in row; what should investors do on Wednesday?

Domestic equity benchmarks closed in the red for the 5th consecutive session, tracking geopolitical developments surrounding Russia and Ukraine. Besides, Foreign Institutional investors (FIIs) relentless selling too exerted pressure on the Indian markets amid weak global cues.  

Headline indices trimmed losses in the last hour after declining more than 2 per cent in the morning trade. The broader Nifty managed to close near 17,100, while the Sensex too pared early losses to close lower by less than 400 points.  

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Nifty mid cap and small cap indices corrected more than 1% and 2 % respectively. The 12-share Nifty Bank dropped more than 300 points to close below 37,400.  

Sectorally, realty, media, PSU Bank and IT were among top losers, while auto, healthcare, financial services and consumer durables led the recovery.  

Meanwhile, record 176 stocks traded on 52-week low value on the BSE on Tuesday as companies listed on the index witnessed capital erosion of Rs 12.23 crore in the last five trading sessions.  

As markets continue to trade lower, analysts and experts decode triggers and devises strategy for investors going forward.  

Vijay Dhanotiya, lead of Technical Research at CapitalVia Global Research Limited

The market failed to show resilience to stay above the level of 17000. As of now, the short-term technical condition of the market shows that the expected range of the market is likely to be between 16800 and 17400. While it is subject to further price action evolution, our research suggests it is prudent to wait for volatility to subdue and technical factors to improve before attempting to build short to medium term investments. As such we retain our cautious stance, until we see further improvement in the market. 

Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal Financial Services Limited 

Nifty remained highly volatile as it opened gap down by more than 350 points and after touching 16843 levels it recovered sharply by more than 300 points. It continued its weakness for fifth consecutive session and closed near to 17100 zones in losses of around 110 points.  

It is forming lower highs - lower lows from the last four sessions but during the day it formed a Bullish candle and turned exactly from its previous support of 16850 zones. Now, it has to hold above 17000 zones for an up move towards 17200 and 17350 zones. Support can be seen at 17000 and 16850 levels. 

S Ranganathan, Head of Research at LKP securities 

'The Trend is your Friend' and the street keeps reminding investors and traders just how tough it is to focus on the famous quote of Peter Lynch when you have a confluence of factors swaying you away from your investee companies.  

Just when the Global Economy is beginning to recover and normalise from the impact of the pandemic, Russia has recognised the independence of separatist regions in Ukraine, thereby inviting the possibility of severe sanctions being imposed by the US & EU.  

Today's Trade saw selling pressure across several Pharmaceutical & Auto Ancillary companies with exposure to the EU. Despite a recovery in afternoon trade, almost all sectoral indices ended in the red with India VIX soaring over 20% today amidst geopolitical tensions and rising oil prices. 

Vinod Nair, Head of Research at Geojit Financial Services. 

Escalation in Russia-Ukraine issue and a sharp surge in oil prices forced global markets to plunge sharply. Indian equities opened with heavy losses tracking overnight fall in the global market and its adverse spill over to commodity prices. However, the domestic market managed to trim down its losses during the late session. Continued offload by FIIs has increased volatility, while DIIs are adding position.