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Indian stock markets can fall another 10%

Benchmark indices have turned negative for the year with Monday's 1.7% slide in the markets. A double-digit fall in benchmark indices is possible, as markets are not fully pricing global headwinds

Market trends | BSE Sensex | Nifty50

Puneet Wadhwa & Nikita Vashisht  |  New Delhi 

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  • Budget euphoria is slowly fading away on Dalal Street as global headwinds stare in the eye. Geo-political tensions involving Ukraine and Russia, coupled with fear of easy money drying up amid soaring inflation, are giving a rude reality check to stock market investors. Yesterday, the plunged over 1,300 points in intra-day trade while the slipped below the 17,150 level. The Nifty 50 and BSE-Sensex tumbled for a third straight day and moved below the highs made on Budget-day.

    The indices ended nearly 2% lower at 17,214 and 57,621, respectively. With this, the have turned negative for the year, and are down 1 per cent YTD. U R Bhat, who is co-founder & director at Alphaniti Fintech, believes can fall another 3-5% from here on as an actual clash on the Russian border is not priced in at all. Brent crude prices are already up 16% in a month amid simmering tensions between Russia and NATO over Ukraine. Brent is above $93 per barrel-mark but a full-scale war can take it past the $100 per barrel mark, analysts worry. Most analysts, including those at Rabobank International and BofA Securities, see Brent hitting the $125 mark by June 2022. On their part, the benchmark indices – the S&P and the – have slipped around 3% each in the past one month. On the contrary, the Nifty Energy index that comprises upstream players like Reliance Industries and ONGC has outperformed with a rise of nearly 6% as oil prices rose during this period. Going-forward, market mavens suggest investors to stay stock-specific and tread cautiously in the . These global factors will continue to dictate market trend on Tuesday as well. Domestically, investors will track the three-day RBI policy meeting, which will begin later today. That apart, December quarter result of prominent companies, including Bharti Airtel, Escorts, Indraprastha Gas, IRCTC and Godrej Consumer products will be on investor radar. Moreover, shares of Adani Wilmar will also debut on the bourses today.

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    First Published: Tue, February 08 2022. 08:00 IST