Russia-Ukraine war leading to inflation in market due to major impact in the Stock Market.

Russia-Ukraine war leading to inflation in market due to major impact in the Stock Market. Indian market extended the rally in the second (truncated) week ended March 17 adding almost four per cent as foreign institutional investors (FIIs) turned net buyers after 10 weeks, tensions between Russian and Ukraine de-escalated and crude oil prices fell. For the week, BSE Sensex rose 2,313.63 points (4.16 per cent) to end at 57,863.93 while the Nifty50 added 656.6 points (3.94 per cent) to end at 17,287.05. All sectoral indices ended in the green with Nifty Auto and Bank indices up over 5 per cent each and Realty index rising 4.7 per cent. Broader indices — BSE mid-cap and small-cap — added two per cent each, while large-cap index rose four per cent. The supply-chain crisis and trade shocks due to Russia’s invasion of Ukraine will lead to a huge rise in inflation over 6 to 8 months. As the Indian government cuts oil excise duties to counter this surge, the current account deficit will widen, weighing on the country’s growth. HDFC Bank recently downgraded its growth forecasts to 7.9% from the 8.2% projected earlier. The bank expects the current account deficit to stand at 2.3%. Russia and Ukraine hold a significant share of the global commodities trade. Russia supplies 10% of the global nickel. Together with Ukraine, it accounts for 29% of the global wheat exports. Some other commodities they supply extensively include palladium, natural gas and corn. So, it comes as no surprise that the commodities sector touched record highs recently. The prices for nickel, aluminium and wheat rallied to their highest in 50 years on March 4, 2022. Impact on Indian Market 

Technically, Nifty is giving proper follow-up of bullish engulfing candlestick formation on weekly chart whereas it managed to close above its 200-DMA and 50-DMA however 100-DMA of 17380 is an immediate hurdle; above this, we can expect a further strength towards 17,600/17,800 levels. On the downside, 17,200 should act as an immediate support level while 200-DMA of 17000 will be a strong base at any pullback.

Bank Nifty

Banknifty also witnessed a strong pullback from lower levels however 36,700-37,300 is a critical resistance area and if it manages to take out this area then we can expect a short-covering rally towards 38,000/38,500 levels. On the downside, 36,000 is immediate support while 35,500/35,000 are the next support levels.