Russia

Equity markets staged a sharp rebound as investors assessed the fallout of the Russian invasion of Ukraine and the impact of US sanctions against Russia. The new sanctions were seen as weaker than expected, helping boost sentiment. The retreat in crude oil and other commodity prices also helped soothe investors’ nerves.

The benchmark Sensex rose 1,328 points, or 2.4 per cent, to end the session at 55,858, while the Nifty50 index closed at 16,658 with a gain of 410 points, or 2.5 per cent. In the previous session, both indices had posted their biggest single-day fall in 20 months, crashing nearly 5 per cent. The India VIX index cooled off 16 per cent, after jumping over 30 per cent on Thursday, a sign of improvement in sentiment.

The US and its allies have exempted Russia’s oil exports from sanctions. They also refrained from blocking its access to the SWIFT global payment network.

“Most oil exporters are part of the SWIFT protocol. So the decision not to keep Russia out of it was a relief to investors. All the worst fears related to Russia-Ukraine tensions may have played out. It seems oil prices may have peaked. The only thing left to factor in could be more severe sanctions,” said U R Bhat, co-founder, AlphanitiFintech.

“The sanctions weren’t as tough as one thought. And the decision to keep SWIFT out of sanctions has taken most of the worries about the economy away. The expectation is that the Ukraine conflict will get over within a week, instead of being a prolonged messy conflict,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies.