Sensex seesaw of 3,500 its sixth biggest 2-day swing

Sensex seesaw

MUMBAI: Easing of geopolitical tension in Europe about a probable Russian invasion of Ukraine and the resulting slide in crude oil prices helped the sensex recoup its entire loss of Monday with a 1,736-point rally led by Reliance Industries, Infosys and HDFC Bank. The day’s gains came on the back of strong buying by domestic funds and late-session short covering by speculators who wanted to limit their losses, market players said. Foreign funds, on the other hand, continued to take money off Indian stocks, official data showed.

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The sensex opened strong with a surge of over 300 points, picked up gains through the session and closed at 58,142, up 1,736 points or 3.1%. On a closing basis, between Monday and Tuesday, the index recorded swings of nearly 3,500 points, its sixth-biggest two-session swing ever.

All the other bigger swings were recorded during the volatile trading sessions of March 2020, just when the Covid-induced pandemic was unfolding globally, BSE data showed.
Comeback copy

During mid-day Tuesday, the Russian foreign minister indicated that some of its troops were returning back to their permanent locations, which led to strong gains in some of the global markets. FTSE in London started strong and after some initial volatility picked up gains of about 1%. DAX in Germany, too, showed a similar trend and was up nearly 2% in the closing hour. US markets, too, opened strong with Dow Jones, S&P 500 and Nasdaq Composite indices all up between 1.4% and 2% in early trades.

Sensex seesaw In contrast, as tension in the Russia-Ukraine border eased, crude prices fell more than 4% with Brent dipping below the $93-per-barrel mark while gold lost about 1% to around $1,850-per-ounce level. In the past week as geo-political uncertainty in Europe spiked, both these commodities had rallied strongly. The day’s strong rally in the sensex notwithstanding, a section of the market players said that high volatility may continue. “It was more of a relief rally after the markets had been on a downward curve for the last few sessions,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities. “…the ongoing concerns like geo-political tensions, US rate hike fears and rising inflation could continue to keep investors on edge and the markets may remain volatile”, Chouhan said.

The rate hike fears in the US are expected to also keep foreign investors nervous. Since January, foreign portfolio investors (FPIs) have been taking money out of emerging markets, Sensex seesaw including India, institutional sales people said. CDSL and BSE data showed that so far in February, FPIs have net sold Indian stocks worth about Rs 15,100 crore, in addition to about Rs 33,300 crore in January. On Tuesday alone, the net selling figure was worth Rs 2,300 crore, BSE data showed.

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