Benchmark indices recover after falling over 1,000 pts: What is driving the market?

Indian market rebounded after falling over 1,000 points and were trading marginally higher. Earlier, Russian Ukraine tensions escalated further after Putin put his nuclear forces on alert. The Indian government also held a high level meeting on the Ukraine crisis on Sunday. In the opening session, Sensex fell as much as 1,023 points while Nifty lost around 302 points. But after a sharp recovery, at 12.25pm, Sensex was up 0.1% to 55,896 points while Nifty rose 0.18% to 16,689 points.

Here are some of the factors that are encouraging the investors:

1. Peace talks: Investors awaiting results of peace talks between Ukraine and Russia. President Volodymyr Zelensky of Ukraine agreed on Sunday to have Ukrainian officials take part in talks with Russia “without preconditions,” even as President Vladimir Putin further escalated tensions by placing his nuclear forces on alert.  Earlier, Russia's central bank told brokers to not allow foreigners to sell their securities effective from today, according to news reports.

2. US Fed move: Investors don't expect a sharp rate hike from the US federal reserve and other big central banks post Russia-Ukraine tensions. The Fed is likely to mellow down on its tightening given the impact of geopolitical tensions on global growth. Earlier expectations that the Fed will hike seven times this year are now being pared down, analysts said. Earlier,  Western nations blocked major Russian banks from accessing the international money transferring channel SWIFT

3. Ahead of key India macroeconomic data: The Government will announce key gross domestic product data due later today after 5.30pm for the December quarter. According to a Bloomberg poll, GDP for the December quarter was estimated at 5.9% from 8.4% in the earlier quarter. Government will also announce key fiscal deficit data for April-January period and eight infrastructure industries index data for January month due later today.

4. RBI Move: The Reserve Bank of INdia's rate setting panel will likely continue with its accommodative stance and hold interest rates despite geopolitical risks in the wake of Russia Ukraine conflicts as it continues to take a dovish view on inflation, according to analysts. RBI widely expected to begin tightening monetary policy only later this year and altered geopolitical situation since the last meeting of the MPC in early February would not lead to any immediate rate changes.