Indian shares rebounded on Friday as the West’s sanctions on Russia for invading Ukraine were not as harsh as expected and early signs indicated no direct involvement in the war by other countries.
The sanctions on Moscow so far do not cover oil and gas trade or disconnect Russia from the global financial system.
The S&P BSE Sensex closed 2.44% higher at 55,858.52, while the NSE Nifty 50 index ended up 2.53% at 16,658.40. The key equity indices had tumbled 4.7%, their worst decline in over a year, on Thursday after Russia’s invasion of Ukraine.
“The US and Europe have announced tough sanctions against Russia for its Ukraine invasion, but they were not as severe as feared,” said Ruchit Jain, Lead - Research at 5paisa.com.
Ukrainian President Volodymyr Zelenskiy on Friday urged Europe to impose stricter sanctions on Moscow such as banning Russians from entering the European Union, cutting Moscow off from the SWIFT global interbank payments system and an oil embargo, Reuters reported.
If Russia was kicked off SWIFT, it would essentially be cut off from much of the global financial system.
But analysts don’t expect to see that happening as the move could seriously hurt other economies and affect the global banking industry as well.
“It appears this world is preparing to return back to risk-on and therein lies the explanation why yesterday’s dramatic fall could be a secure bottom for a good time to come in stocks,” said Sushil Kedia, the founder and chief executive officer of KEDIANOMICS.
Analysts expect the war to be over soon.
“If it turns out to be a short war with Russia succeeding in putting a pro-Russian government in Ukraine soon, markets are likely to bounce back,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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