News

Published: Feb 23, 2023
Updated: Feb 23, 2023

Indian Markets Drop for Fourth Session on Global Cues, Putin's Nuclear Warning, and Fed Minutes

Indian markets fell for the fourth consecutive session on February 23, 2022, to hit a two-week low, tracking losses in global equities. Both the benchmark Sensex and Nifty indices lost nearly 1.53 percent each at closing, with investors losing around Rs 3.88 lakh crore in wealth. Both Sensex and Nifty lost around 1.75 percent and 3.04 percent, respectively, so far this year.

The fall in Indian markets was attributed to several factors, including Putin's nuclear warning, the release of Fed minutes, the RBI minutes, the Adani Group saga, FII selling, and December quarter earnings.

Putin's Nuclear Warning:

On Tuesday, Russian President Vladimir Putin issued a warning to the West regarding the situation in Ukraine, which was met with criticism from the US Secretary of State Antony Blinken and NATO Secretary-General Jens Stoltenberg. This development has the potential to impact global markets, particularly if the war intensifies as Putin hardens his stance.

Fed Minutes:

Investors are concerned about the release of the Federal Reserve meeting minutes later on February 22, which is expected to show US policymakers remaining resolutely hawkish, leading to a drop in market sentiment. Investors are closely monitoring the Fed's stance on interest rates and inflation, as it could have significant implications for the global economy.

RBI Minutes:

Investors are keeping a close watch on the Reserve Bank of India's February rate-setting panel meeting minutes for cues on the trajectory of rate hikes.

Adani Group Saga:

The four-week-long selloff of Adani Group stocks resumed, causing concern among investors and is likely to have a significant impact on the Indian stock market.

FII Selling:

Foreign investors have been selling Indian equities since the start of the year, with sales amounting to around $3.37 billion so far. However, there are signs that this trend may be reversing, as foreign investors started buying Indian equities last week.

December Quarter Earnings:

India Inc's profitability moderated in the third quarter of FY23, with corporate earnings coming in below analysts' expectations. The underperformance was driven by the commodities sector, while financials and autos performed relatively well. However, analysts remain cautiously optimistic, with expectations that the good Rabi harvest and declining CPI inflation will gradually boost demand for staples.