After last week’s gains, spike in crude prices and profit-booking dragged Indian equities on Monday. Both the Sensex and the Nifty50 were the worst performers for the day after falling 1% each, among the major Asian Indices. While Taiwan TAIEX rose 0.6%, KOSPI and Hang Seng declined 0.8% and 0.9%, respectively, on Monday.
The Nifty50 had gained nearly 9% over the last eight sessions through Thursday, amid hopes of progress in Russia-Ukraine peace talks and softening crude oil prices. However, with little signs of conflict easing, the Brent resumed its upward spiral and has added about 15% during the last three sessions. Barring two sessions, Brent prices have been closing above the level of $100 per barrel since February 28, with the March 8 closing of $127.98 being the highest.
“After witnessing a sharp recovery of around 10%, there is some fatigue visible in Indian markets with profit booking emerging at higher levels. The ongoing Russia-Ukraine conflict and fluctuation in oil prices amid supply constrain is likely to keep investors on edge,” said Siddhartha Khemka, head – retail research at Motilal Oswal Financial Services. Khemka expects 17,000 to act as a strong support for Nifty50 in the near term.
The return of foreign buying seems to be short-lived. On Monday, FPIs sold shares worth $389.11 million, against local buying of $33.22 million, provisional data on the exchanges showed. Overseas investors had bought almost half-a-billion worth of shares in the preceding two sessions.
While the Sensex settled 571.44 points lower at 57,292.49 points on Monday, the broader Nifty declined 169.45 points to end the day at 17,117.60. Rate sensitive sectors like automobiles, banks, realty and power lost value on Monday, while metals, media and pharma gained. The BSE Midcap lost 0.7%, while the gauge for small-cap added marginal gains. Even the volatility index — India VIX surged 9% to 24.62 levels, adding to overall discomfort to the market.
Meanwhile, drug makers, who have inked pact with Medicines Patent Pool (MPP) to make the generic version of Pfizer’s Covid pill, surged in Monday’s trade. While the shares of SMS Pharmaceuticals gained the most with 11.6% gains, Strides Pharma rose 5.7%.
Other suppliers like Glenmark Pharmaceuticals, Granules India and Laurus Labs gained between 2% and 3%.
“Nirmatrelvir is a new product and requires substantial manufacturing capabilities to produce, and we have been very impressed with the quality of manufacturing demonstrated by these companies,” said Charles Gore, MPP executive director on Thursday.
