Bulls run on Dalal Street as Putin tones down on Ukrainehttps://indianexpress.com/article/business/market/bulls-run-on-dalal-street-as-putin-tones-down-on-ukraine/

Bulls run on Dalal Street as Putin tones down on Ukraine

Stock markets were in for a bull run after Vladimir Putin said Russia saw no need to use military force in the Crimea.

President Vladimir Putin listens journalists' questions on current situation in Ukraine at the Novo-Ogaryovo presidential residence outside Moscow. (AP)
President Vladimir Putin listens journalists’ questions on current situation in Ukraine at the Novo-Ogaryovo presidential residence outside Moscow. (AP)

Indian equities advanced more than 1 per cent on Tuesday, recovering from previous day losses on hopes of an easing crisis in Ukraine. Benchmark indices bounced back to clock their best daily gain in seven weeks. 

After a quiet start to Tuesday’s trading, the Sensex zoomed past its crucial psychological mark of 21,000. The 30-share gauge rose 1.26 per cent (263.08 points) to settle at 21,209.73. The 30-share benchmark is 165 points away from its all-time high of 21, 374. The Nifty ended 1.23 per cent higher (76.50 points) from the previous close, to settle two points adrift of the 6,300 mark, after Russian President Vladimir Putin said Russia saw no need to use military force in the Crimea region of Ukraine.

The FII buying spree continued for the 14th consecutive session on Tuesday. Domestic institutional investors (DIIs) were net sellers on Tuesday, after purchasing shares in the previous two sessions. DIIs sold shares worth Rs 344.50 crore ($55.61 million) on Tuesday, after buying Rs 1,578 core ($255 million) in the cash segment.

“Markets were relieved after the Putin government announced to withdraw some military exercise. The situation is a bit volatile and we can expect some very sharp moves in the near term. The market will keep a close watch on the situation in the Crimea region,” said Andrew Holland, CEO, Ambit Investment Advisory.

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Even as the political situation improved a little after Tuesday’s announcement by Putin, analysts remain sceptical and uncertain about the economic situation in the region. “The situation in and around Ukraine remains very fluid and uncertainty over what comes next remains very high,” said UBS economist Anna Zadornova.

“Pro-Russian protests in other parts of Ukraine, how quickly the interim government can secure external funding and relations with the Opposition in the run-up to the elections on May 25 are some of the few points we believe can have strong market implications,” Zadornova said in a research note.

The mood reflected in broader markets too. The BSE mid- and small-cap indices gained 1.3 per cent and 1 per cent, respectively. Ten out of 12 sectoral indices on the BSE ended in the green. Market breadth was strong, with 28 out of 30 Sensex companies ending in the green. Overall, 1602 Sensex companies advanced compared to 1,109 that declined.

Hindalco Industries was the top performer with 7.82 per cent gains and Sesa Sterlite surged almost 5 per cent, taking the gauge of metal shares up more than 3 per cent. Shares of banks and financial companies ended up 2.5 per cent, while capital goods, power, and oil & gas shares gained in the range of 1-2 per cent.