Indian indices settle negative; Sensex down over 350 points

India’s key indices - S&P BSE Sensex and NSE Nifty50 - settled lower on Thursday amid rising crude oil prices triggered by the Russia-Ukraine war.

Sensex settled 0.7 per cent or 366 points down at 55,103 points, whereas Nifty 0.7 per cent or 108 points down at 16,498 points.

Among stocks, Ultratech Cement, Asian Paints, HDFC Life, Shree Cements, and Eicher Motors were the top five losers among the Nifty 50 companies, down 6.7 per cent, 5.2 per cent, 5.0 per cent, 4.5 per cent, and 3.5 per cent, respectively.

ONGC, UPL, Power Grid Corporation of India, Wipro, and Tech Mahindra, on the other hand, were the top five gainers.

On the sectoral indices front, Nifty auto, bank, financial services, and FMCG were the top losers, NSE data showed.

“The subdued trend of the domestic market continued however the level of volatility is reducing. Today large caps were more muted, dragged by FIIs selling, compared to the broad market,” said Vinod Nair, Head of Research at Geojit Financial Services.

“The release of strategic reserves of oil in India and abroad along with increased output from Opec is expected to ease crude prices in the future. Additionally, the Indian market will look at the state election exit poll data while the global market on war developments, BoE, and Fed policy meeting status from next week.”

After rising marginally in the opening session, India’s key indices -- S&P BSE Sensex and NSE Nifty50 -- declined in the afternoon session on Thursday. At 1.08 am, Sensex was 0.5 per cent or 259 points down at 55,209 points, whereas Nifty was down 0.5 per cent or 82 points at 16,523 points.

Among stocks, Tech Mahindra, Asian Paints, HDFC Life, Dr Reddy’s, and Shree Cement were the top five losers in the afternoon session, down 4.8 per cent, 4.7 per cent, 3.6 per cent, 2.9 per cent, and 2.9 per cent, respectively.

On the sectoral indices front, Nifty auto and consumer durables traded deep in the red, data showed. Coal India, Wipro, Power Grid Corporation of India, Tech Mahindra, and HCL Technologies, on the other hand, were the top five gainers, NSE data showed.

India’s key indices -- S&P BSE Sensex and NSE Nifty50 -- rose marginally in the opening session on Thursday possibly due to some value buying after the recent decline in the indices.

At 9.56 am, Sensex was 0.3 per cent or 178 points up at 55,647 points, whereas Nifty 0.3 per cent or 55 points up at 16,661 points.

Among stocks, Tech Mahindra, IOC, Wipro, HCL Technologies, and BPCL were the top five gainers in the opening session, rallying 3.1 per cent, 2.6 per cent, 2.6 per cent, 2.4 per cent, and 2.3 per cent, respectively.

Asian Paints, HDFC Life, Ultratech Cement, SBI LIfe, Eicher motors, on the other hand, were the top five losers, NSE data showed.

“Nifty has corrected 11 per cent from the peak. But with FIIs being relentless sellers, further correction cannot be ruled out. Investors may start nibbling at high quality stocks which have corrected disproportionately,” said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

WHEAT PRICES HIT HIGH: Riding on a possible supply disruption of foodgrains - especially wheat -- due to the ongoing war in Ukraine, wheat’s prices have hit a record high in India.

Both Russia and Ukraine are major producers of wheat.

In the key market of Madhya Pradesh’s Indore, the foodgrain was sold at Rs2,400 per quintal against Rs2,000-2,1000 until recently.

“There is a heavy demand from exporters apparently because of the talks that the supply line from Russia and Ukraine may dry up if the tensions persist,” said an Indore-based veteran trader.

“Prices typically remain low during this time of the year as freshly harvested rabi crops make their way into the markets. However, the war propped the prices up this time,” the trader said.

He sees the wheat prices going up by another Rs100-200 per quintal in the near term.

In the US market too, wheat futures have risen nearly 50 per cent in the past one month, which in a way is also making Indian wheat attractive for buyers.

India usually produces surplus foodgrains as against its domestic requirements and the fresh export demand comes in as a shot in the arm for the wheat traders.

The price of a bushel of wheat surged to levels not seen in more than a decade as investor anxiety surrounding potential supply shortages due to the conflict between Russia and Ukraine stretched to its seventh day, MarketWatch reported.

Wheat futures for May delivery on the Chicago Mercantile Exchange surged to $10.28 a bushel, the highest since 2014, according to analysts at Commerzbank, who noted that it rose by its expanded 75 cent-limit, having climbed by its 50-cent limit on Tuesday.

“Both Ukraine and Russia are large producers of wheat, together accounting for around 30 per cent of the world’s wheat exports, so this is one of the channels where the direct economic impact is acute,” said strategists at Deutsche Bank led by Jim Reid, in a note to clients.

Ukraine announced at the start of the week that its key Black Sea ports would remained closed until the Russian invasion ends, “meaning that no wheat shipments can be sent from Ukraine by sea for an indefinite period”, said Carsten Fritsch, commodity analyst at Commerzbank, MarketWatch reported.

“Furthermore, shipping companies are no longer accepting orders for deliveries from or to Russia. And in any case, virtually no buyer is likely to be willing at present to order wheat from Russia. This means that up to 30 per cent of global wheat exports are now more or less cut off from the market,” said Fritsch.

He added that the Ukraine war may make it difficult to plant spring grains, reducing next season’s supply and sufficient alternative suppliers would be hard to find.

Corn and soybean oil futures prices have also been surging, MarketWatch reported.

Continuing hostilities between Russia and Ukraine are set to impact the domestic selling prices of wheat and flower oil. Both countries produce massive quantities of wheat, while Ukraine is one of the world’s largest sunflower seeds exporters.

Though India is self-sufficient in wheat, it does import some quantities of high grade grain, analysts said.

Moreover, the reduction in Russian and Ukrainian wheat in the international market will give an attractive opportunity for Indian exporters, thereby slightly pushing up domestic prices.

Lately, domestic wheat prices have seen an increase of Rs 300 per quintal to Rs 2,300 per quintal. This trend is likely to continue till the arrival of new supply from April onwards. However, in terms of sunflower seeds, India is heavily dependent on Ukrainian and Russian imports.