Russia-Ukraine conflict: On Thursday, the stock market dropped more than 4%, and the rupee had its worst session in more than ten months, as Russia’s invasion of Ukraine drove oil prices skyrocketing and fueled inflation worries. The BSE Sensex and Nifty 50 finished in the red, falling about 5% on Thursday after Russian President Vladimir Putin authorised soldiers to enter Ukraine. Benchmark indexes fell the most in almost two years, following a market crisis in 2020 due to Covid-induced lockdown limits. The BSE Sensex fell 4.7%, or 2,702 points, to close at 54,530.
On the day of the monthly F&O expiry, the Nifty 50 index fell 815 points, or 4.8%, to close at 16248. The Nifty’s volatility index, which measures the degree of volatility traders predict in the Nifty 50 over the next 30 days, reached its highest level since mid-March 2020.
The Nifty index of public sector banks. NIFTY PSU lost the most ground among the sub-indices, falling 8.3 percent.
Tata Motors TAMO.NS fell 10.3%, becoming the Nifty 50’s largest loser.
Top Indian pharmaceutical companies, such as Dr Reddy’s Laboratories REDY.NS and Sun Pharma SUN.NS, which have considerable commercial exposure in Russia and Europe, lost 2.6 percent apiece.
With Brent crude breaking the $100 mark for the first time in seven years following Russia’s military incursion in Ukraine (Russia-Ukraine conflict), both benchmark indexes wilted with a 5% drop as the volatility index soared 30% today, wiping away over Rs 10lac crores of investor capital. A glance at the Advance-Decline ratio tells it all, as the carnage, along with the volatility seen today, was excruciating for both investors and traders.
US stocks continue to fall as Ukraine declares a state of emergency amid growing worries of a full-fledged Russian invasion. The Dow Jones dropped 1.4 percent. The S&P 500 index fell 1.8 percent, while the Nasdaq fell 2.6 percent. The yield on the 10-year Treasury note increased by 3 basis points to 1.98 percent. The global kettle is on fire. If that isn’t enough, the Fed’s hawkish stance on rate hikes has market participants on edge.
As the economy attempts to get back on track, the current disinvestment process will undoubtedly provide a boost to the government.