Post Market views - Feb 28, 2022 - Reliance Securities

Mr Mitul Shah, Head Of Research at Reliance Securities

Domestic equity markets witnessed a positive rebound mainly driven by metal stocks and the hopes for Russia-Ukraine negotiations. Nifty increased by 0.8%. Broader markets moved largely in tandem with the main indices with Nifty MidCap and Nifty SmallCap increasing by 1% and 0.6% respectively. Most sectoral indices ended positive. Nifty Metal increased the most by 4.8% followed by Nifty IT (+0.98%). Russia launched an attack on Ukraine last week, the scale of which, startled the markets, triggering a spike in volatility. In response, the US and other Western countries, imposed sanctions, targeting Russia's major banks and restricting exports of technology. Yet the sanctions stood short of removing Russia from the payment system and cutting off energy purchases from Russia. Dow Jones dropped 0.1% for the week, while the S&P 500 and Nasdaq gained 0.8% and 1.1% respectively.

The European Union wants to cut all links between Russia and the global financial system. The madness seen last week may have subsided, but the participants are still having anxiety attacks over the Ukraine issue. The average downside in Indian market is 16-17% in past few wars, while recovery was 23% in 3 months and 34% in 6 months. Now in Russia-Ukrain War, NIFTY is down 11% from its peak of ~18,600. Even if we assume market recover by 20% by end of December 2022, we will get our year-end target of 20,000 on Nifty, which is based on 22x FY24 earnings

Source : Equity Bulls

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