Weekly market wrap: Sensex falls over 500 points on boiling crude oil prices

Elevated crude oil prices amid the ongoing conflict between Russia and Ukraine once again empowered bears to walk freely on Dalal Street for the week ended March 25. As a result, the benchmark BSE Sensex retreated 501.73 points, or 0.87 per cent, to 57,362.20 during the past five trading sessions. Likewise, the 50-share NSE Nifty index also lost 134.05 points, or 0.78 per cent to 17,153.

Meanwhile, as many as 34 stocks in the Nifty index also closed the week in the red. With a fall of 7.79 per cent, Britannia Industries emerged as the top loser in the index. It was followed by Hindustan Unilever (down 7.09 per cent), Titan Company (down 6.63 per cent), Nestle (down 6.14 per cent) and Kotak Mahindra Bank (down 5.04 per cent).

On the other hand, Hindalco, Dr Reddy's Laboratories, Coal India, JSW Steel, UPL and Reliance Industries gained between 4 per cent and 8 per cent.

Vinod Nair, head of research, Geojit Financial Services said, "After a strong rally last week, the market turned sideways with a negative bias as global cues haunted domestic investors forcing them to stay sidelined. Elevated crude prices, tightening monetary policy by Fed, higher inflation levels along with rising Covid cases in parts of the world led to this downtrend."

Brent crude futures traded near the $117 a barrel mark on global supply concerns amid the ongoing Russia-Ukraine conflict. It traded around $106 per barrel on March 17.

Sectorwise, the BSE FMCG index tanked the most 3.18 per cent. It was followed by Bankex (down 2.92 per cent), Capital Goods (down 2.04 per cent), Auto (down 1.83 per cent) and Realty (down 0.37 per cent). The BSE Metal, Oil & Gas, IT and TECk index gained between 1 per cent and 5.50 per cent.

Milind Muchhala, executive director, Julius Baer said, "The Indian equity markets continue to be in a grind, influenced by and reacting to incremental news flow on the global front, especially related to the geopolitical situation and Fed rhetoric."

He further added that the two key challenges and monitorable for the markets in the near term are the persistent inflationary pressures and the rising bond yields. While the inflationary pressures have been building up over the past few months, the geopolitical situation has worsened the situation, as Ukraine and Russia are large players in energy and several commodities.

"A prolonged geopolitical situation and elevated prices will gradually start weighing on demand and profitability and can lead to a cut in growth and earnings estimates. Also, the recent rise in bond yields can have implications for flows and equity valuations," Muchhala added.

The forthcoming week is likely to see some volatility with scheduled F&O series expiry on March 31 and traders balancing their positions going ahead for the next series. On the economic front, market participants would be eyeing the data of the Consumer Price Index (CPI) which is scheduled to be released on March 31.

The coming week is also going to be a start of a new month and both cement and auto stocks in the next week would be buzzing on reporting monthly sales figures. On April 1, Balance of Trade data will also be released. India's trade deficit was revised lower to $20.88 billion in February of 2022, compared to a preliminary estimate of $21.1 billion and $13.12 billion a year earlier.

Foreign institutional investors turning into a buying mode is a positive for the market. Overseas investors lapped up shares worth nearly Rs 1,900 crore during the first four trading sessions of the week.

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