Nifty Plunged on Terrible Global Cues as Russia Launched Ukraine Invasion

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India’s benchmark stock index (NSEI) closed around 16247.95 Thursday; plunged almost -4.78% on terrible global cues as Russia launched Ukraine’s invasion. SGX- was already under pressure overnight as Wall Street Futures plunged on the U.S. warning that Russia may scale an imminent full-scale invasion of Ukraine. On early Thursday, just around 45-minutes before the Indian NSE opening, Russian President Putin officially announced Russia has decided to carry out a ‘military operation’ in Ukraine.

Putin said that the Russian army would carry out the ‘demilitarization and denazification’ of Ukraine and end eight years of war in eastern Ukraine (Donbass region), where Ukraine government forces have been fighting Russian-backed separatists. Putin said Russia doesn’t plan to ‘occupy’ its neighbor, but that Russia must ‘defend itself from those who took Ukraine hostage’ -the U.S. and its allies who had crossed Russia’s ‘red line’ with the expansion of the NATO alliance.

In what has been described as the largest military attack on European soil since WW II, Russian troops marched across the border into the eastern region of Donbass, accompanied by hundreds of tanks and advanced by missile attacks on several Ukrainian cities, with reports of explosions in the Kyiv capital.

U.S. President Joe Biden said in a statement late Wednesday (U.S.): “President Putin has chosen a premeditated war that will bring a catastrophic loss of life and human suffering. Russia alone is responsible for the death and destruction this attack will bring. The world will hold Russia accountable.”

India’s Nifty recovered soon after opening the gap down on a report that Ukrainian soldiers are laying down their arms and abandoning positions. Nifty made an intraday high around 16702.60. The market was expecting an early end of the Russian military ‘special’ operation. But in the closing hour, Nifty again slumped and made a day low around 16207.45 on reports of renewed Russian attacks on all fronts and missile attacks on Kyiv.

Russia later clarified that the Russian operation in Ukraine is intended to achieve two goals set out by President Putin: Demilitarization and denazification of Ukraine. Putin has made it clear to the Kremlin what he wants from Ukraine is neutrality and a refusal to deploy offensive weaponry. And it’s Putin who will take the duration of the Russian ‘special’ military operation in Ukraine after reviewing its progress/result.

Although Biden already made it clear NATO/U.S. forces will be in defensive mode and will not fight with Russia, Putin also warned that if any third country tries to intervene militarily, then Russia will take unprecedented action, never seen in history.

What’s next?

As per the latest report, Russia has intensified its offensive in the Ukraine capital Kyiv and may end the military operation soon (by the weekend) through the symbolic surrender of the Ukrainian army and present political leadership led by Zelensky. Ukraine may also soon declare that it will not join NATO and will be neutral. In any way, considering the huge global outcry over the Ukrainian invasion, Putin may not drag it long and may end the ‘special’ military operation to ‘liberate’ Ukraine from ‘fascists’ by the weekend.

Technically, whatever may be the narrative, Nifty Future (Mar) now has to sustain over 16050 for any meaningful rally to 16200/16425-16675/16775 and 16850/16975-17175/17400 in the coming days. On the flip side, sustaining below 16000-15975, the Nifty may further fall to 15800/15450-15225/15000 in the coming days if Russian risk continues and the Ukraine war dragged beyond coming Monday, resulting in huge human tragedy. Lingering Russian military action on Ukraine will result in oil well over $120 along with higher and commodities, and it will be negative for the Indian economy, resulting in higher imported inflation.

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