The Morning Edge: US Resumes Ukraine Aid as Ceasefire Hopes Hang in the Balance

 In a significant diplomatic development, the United States has agreed to resume military aid and intelligence sharing with Ukraine following talks where Kyiv accepted a US proposal for a 30-day ceasefire in its ongoing conflict with Russia. US Secretary of State Marco Rubio stated that the offer will now be presented to Moscow, emphasising that the ball is in Russia’s court. However, Russian President Vladimir Putin has repeatedly rejected ceasefire proposals, insisting on a deal that ensures Russia’s “long-term security”. H had ruled out territorial concessions.

Meanwhile, President Donald Trump’s abrupt reversal on tariffs added to the day’s drama, as he walked back a pledge to double steel and aluminium tariffs on Canada to 50% just hours after announcing the move. The swift policy shift, which followed Canada’s decision to drop a planned 25% surcharge on electricity exports, sent ripples through financial markets. As geopolitical tensions and trade uncertainties collide, the world watches closely to see if diplomacy can prevail—or if further escalation lies ahead.

Data
The US labour market showed resilience in January, with job openings rising by 232,000 to 7.740 million and layoffs falling to their lowest level since June 2023, according to the Labor Department’s JOLTS report. Nevertheless, December's job openings were adjusted downward to 7.508 million. Additionally, increasing uncertainty regarding tariffs and government spending reductions poses a risk to the pace of economic activity. Small-business confidence fell for the third consecutive month in February, with the NFIB’s Optimism Index dropping 2.1 points to 100.7. The Uncertainty Index reached 104, its second-highest level on record. These trends underscore a mixed economic landscape, where labour market strength is being overshadowed by declining business sentiment and mounting trade-related anxieties, raising concerns about the broader economic outlook.

Markets
Overnight
US stocks fell sharply on Tuesday, extending the biggest selloff in months as investors worried about the economic impact of escalating tariff threats. The S&P 500 briefly entered correction territory, dropping 10% from its 19 February record high, while volatility persisted amid mixed trade updates and fleeting hopes of a Ukraine-Russia ceasefire. Retailers and airlines were hit hard, with Kohl’s plunging 24.1% after forecasting a steep sales decline and Dick’s Sporting Goods falling 5.7% on a weak annual outlook. Delta Air Lines tumbled 7.3% after slashing its profit estimates, and American Airlines dropped 8.3% on a larger-than-expected loss forecast, dragging the Dow transportation index down 3.1%. Oracle also slid 3.1% after missing revenue estimates. Tariff uncertainty continues to weigh on consumer sentiment and corporate earnings, leaving markets on edge.

US Treasury yields stabilised on Tuesday, moving away from five-month lows. The yield on benchmark 10-year notes rose 6.7 basis points to 4.28%, while the 2-year note yield, which tracks Fed’s rate expectations, increased 5.5 basis points to 3.951%. Although implied volatility in Treasuries is rising, there’s no sign of market dysfunction yet. However, the steep drop in open interest in Treasury futures—a rarely watched metric—has raised eyebrows, especially as President Donald Trump’s tariff agenda threatens to slow the US economy or even push it into reverse.

The US dollar continued to weaken against major currencies on Tuesday, weighed down by trade tensions and growth concerns, as the dollar index fell 0.57% to 103.27—marking its seventh consecutive decline. The euro hit a five-month high after Ukraine agreed to a 30-day ceasefire proposal, while the dollar initially strengthened before slipping against the Canadian dollar following President Donald Trump’s decision to double tariffs on Canadian steel and aluminium imports to 50%. This move came in response to Ontario’s 25% tariff on electricity exports to the US. Meanwhile, US Secretary of State Marco Rubio stated that Ukraine’s ceasefire offer would now be presented to Russia, leaving the next steps in Moscow’s hands.

Brent crude oil prices rebounded slightly after Monday’s sharp decline, with US crude rising 0.33% to settle at $66.25 per barrel and Brent gaining 0.4% to $69.56. However, concerns over a potential US decline and the impact of tariffs on global economic growth limited the recovery. Investors remain cautious as trade tensions and economic uncertainty continue to weigh on market sentiment, keeping oil prices under pressure despite the slight uptick.

  

Day’s Ledger
Economy

• India February CPI data
• India January industrial production data
• US February CPI data
• US crude oil inventories data

Companies

• Dishman Carbogen Amcis board to discuss fundraising plans
• National Highways Infra Trust board to consider dividend
• Railtel Corp of India board to consider dividend
• Power Finance Corp board to consider dividend
• Warren Tea, to consider voluntary delisting of shares

Policy

• RBI to hold OMO purchase for gilts worth ₹500 billion 
• ECB President Lagarde Speaks 
• ECB's Lane Speaks

Tickers

• ADANI GREEN ENERGY's subsidiary, Adani Solar Energy Ap Eight, has commissioned a 250 MW solar power project at Kadapa, Andhra Pradesh.
• BHARTI AIRTEL has transferred its 69.94% stake in Airtel Payments Bank to its subsidiary Airtel.
• GODREJ AGROVET to acquire the remaining 48.06% equity stake in Creamline Dairy Products (CDPL) for ₹9.30 billion.
• HDFC SECURITIES paid ₹6.5 million to settle a SEBI probe for alleged breach of norms related to technology operations and cyber-security measure.
• HEXAWARE TECHNOLOGIES announced the inauguration of its global business headquarters in Jersey City.
• INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY  Board will meet on March 17 to consider the enhancement of the borrowing plan for 2024-25.
• KAYNES TECHNOLOGY INDIA’s  Managing Director Ramesh Kunhikannan has received a show-cause notice from the Securities and Exchange Board of India for suspected violations in the maintenance of a structured digital database with respect to financial results.
• ONGC NTPC GREEN informed that the CCI has approved the proposed acquisition of 100% of the shares in Ayana Renewable Power by ONGC NTPC Green. ONGC NTPC Green is a joint venture between ONGC Green and NTPC Green Energy.
• PB FINTECH to invest ₹6.96 billion in arm PB Healthcare Services.
• RAIL VIKAS NIGAM has emerged as the lowest bidder for a project worth ₹5.55 billion from the National Highways Authority of India.
• RELIANCE JIO, has added 3.9 million subscribers in December, BHARTI AIRTEL added 1.0 million subscribers, while VODAFONE IDEA lost 1.7 million subscribers.
• TATA CONSULTANCY SERVICES to acquire a 100% stake in commercial real estate firm Darshita Southern India Happy Homes for ₹22.50 billion.

Must Read

• Airtel inks agreement with Elon Musk’s SpaceX to offer satellite internet services
• NBFCs seek FAME, PLI-like scheme to incentivise EV finance
• House panel on power to discuss India's nuclear mission
• Government weighs return of merchant charges on UPI, RuPay
• Lilavati Hospital Trust says ₹15 billion misappropriated by ex-trustees; FIRs filed
• Axis Bank eyes up to ₹ 40 billion from stake sale in Axis Finance
• Life insurers' new business premium growth drops 11.6% in February
• Ukraine agrees to US-led ceasefire plan if Russia accepts
• Trump will not impose 50% Canadian steel, aluminum tariffs tomorrow, says top trade advisor
• Iran's President to Trump: I will not negotiate, 'do whatever the hell you want'

Daily Mantra
Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.

Musings

Broad Market Sell-Off: Small Caps Bear the Brunt

Indian markets have seen a broad-based decline, with an average drop of -40.7% across 4,881 companies from their 52w highs. However, the correction is significantly deeper in small-cap stocks, while large caps have shown relative resilience.

Breakdown of Declines (% Change from 52-Week High):

Severe Erosion:
 • 8 stocks have collapsed by 90% or more (-91.2% avg. decline).
 • 44 stocks are down 80-90% (-83.6% avg. decline).
 • 125 stocks have fallen 70-80% (-74.5% avg. decline).
 • 350 stocks have lost 60-70% (-63.9% avg. decline).
 
Broad Weakness:
 • 865 stocks are down 50-60% (-54.4% avg. decline).
 • 1,264 stocks have dropped 40-50% (-44.9% avg. decline).
 • 1,076 stocks have declined 30-40% (-35.4% avg. decline).
 • 619 stocks have fallen 20-30% (-25.5% avg. decline).
 • 268 stocks are down 10-20% (-15.8% avg. decline).
 • 139 stocks have lost up to 10% (-6.1% avg. decline).
 • Only 123 stocks are trading above previous highs (0.0% avg. change).

Market Cap-Wise Impact:
 • Top-100 companies: -27.2% avg. decline (relatively resilient).
 • 101-150 market cap: -32.1% avg. decline.
 • 250-500 market cap: -37.2% avg. decline.
 • >500 market cap (Small Caps): -41.5% avg. decline (worst hit).

Key Takeaway
The correction is disproportionately severe in smaller companies. The steepest losses are concentrated in firms ranked beyond the Top-500, with 4,381 small caps averaging a -41.5% fall. Meanwhile, large-cap stocks dominate the lower decline brackets (0% to -30%), showing relative stability-  Chetan Chandak

Chetan is a published author and a dabbler in mysticism. By day, he trades currency derivatives at an Indian private bank; after hours, he delves into ideas beyond the numbers. His musings—part reflection, part curiosity—are his own and don’t represent views of his bank