Stock markets swung wildly on Monday in tune with the contrasting developments on the Russia-Ukraine standoff.

The BSE Sensex oscillated almost 975 points intra-day but slipped 149.38 points in the end, its fourth straigth session of losses.

A different trend was visible in the forex markets with the rupee ending with gains of 11 paise to close at 74.55 to the dollar.

On a day when all eyes were on the Reserve Bank of India (RBI) for any possible intervention in the spot markets, the central bank announced a $5 billion sell/buy swap auction for a period of two years. This will be conducted on March 8.

In the auction, banks can buy dollars from the RBI and sell them back after two years. The RBI said the auction would enable it to elongate the maturity profile of its forward book.

The RBI had a net forward book — its purchase and sales in the forward market — of $49.10 billion as on December 31, 2021.

The announcement comes at a time of the mammoth initial public offering of Life Insurance Corporation sometime next month, leading to a huge forex inflows.

Forex circles sais that the rupee is likely to witness volatility as oil prices fluctuate amid hardeining of interest rates and dollar inflows becasue of the LIC float.

The RBI, which has maintained a stand to control volatility, is expected to intervene.

At the inter-bank forex market, the rupee opened strong at 74.51 per dollar and rose to the day's high of 74.35 as crude oil traded below $95 per barrel.

Although it gave up some of the gains because of losses in the equity markets, it ended with gains at 74.55 against its earlier close of 74.66 per dollar.

According to IFA Global, the dollar was weaker as foreign banks continued to sell in anticipation of inflows from foreign portfolio investors into LIC's upcoming IPO. The overall weakness in the US currency also supported the rupee.

Equities treaded on choppy waters with the 30-share Sensex opening lower at 57551.65 and dropping to 57167.02.

It then spurted to a day’s high of 58141.65 — a rise of 308 points on hopes of talks between the US and Russia on Ukraine.

Russian claims of shells being fired from Ukraine saw equities coming back under pressure and the index ended with losses of more than 149 points or 0.26 per cent.

The broader NSE Nifty slipped 69.65 points or 0.40 per cent to close at 17206.65.

The India VIX which measures the volatility in stock markets rose to 22.90 up over three per cent.

“Domestic indices started weak, taking cues from negative global peers but in between recouped most of its losses on reports of likely meeting between Biden and Putin over the Ukraine issue," Vinod Nair, head of research, Geojit Financial said.

“The market could not stretch the direction and turned negative as uncertainty in the global markets continued. Investors stood sidelined, impacting volumes. The market is expected to be volatile due to the upcoming Fed meeting and state election results,” Nair said.