On Monday, Indian equities sank almost 2%, joining a global sell-off fueled by increasing tensions between Russia and the West over Ukraine, and as banking stocks continued to fall. As of 0434 GMT, the NSE Nifty 50 index (NIFTY) was down 2% to 17,029, while the S&P BSE Sensex (.BSESN) was down 1.9 percent to 57,023.63. The Nifty volatility index (INDIAVIX), which measures the degree of volatility traders forecast in the Nifty50 index over the next 30 days, increased by up to 21.61 percent.
“The correction in the domestic market is part of a bigger global phenomenon. Foreign institutional investors are selling as a result of growing inflation and tensions between Russia and Ukraine. As a result, the market is uneasy “Saurabh Jain, associate vice president of SMC Securities, agreed.
Energy and metal costs are rising, which is causing inflationary pressures to spread throughout the global economy, according to Jain. Investors will be watching India’s January retail inflation data, which is expected later in the day. Higher crude oil prices are another key macroeconomic issue for India, and if they linger above $95/barrel levels for an extended period, it will be difficult to maintain the accommodative monetary attitude, according to V K Vijayakumar, chief investment strategist at Geojit Financial Services. Meanwhile, India’s government investigative agency filed a police charge against ABG Shipyard Ltd and its proprietors, accusing them of cheating lenders in the amount of 228.42 billion rupees.
The Nifty banking index (BANKNIFTY) was down 2.9 percent, while the public sector banking index (CNXPSUBANK) was down 3.4 percent. On Sunday, the state-run Life Insurance Corporation of India filed draught documents with the market regulator to sell 5% of its shares in order to raise about $8 billion, dwarfing the largest IPO in Asia’s third-largest economy by a wide margin. Individual companies soared as much as 4.9 percent, with driller Oil and Natural Gas Corp (ONGC) rising as much as 4.9 percent as robust crude prices increased its quarterly earnings by sevenfold.