Sell Shock: Russina invasion in Ukraine triggers risk-off sentiment, Sensex tanks 4.7%

With the crude oil prices crossing the $100 mark per barrel, the Sensex dived by 2,702 points at 54,529.91 and the NSE Nifty index crashed 815 points at 16,247.95. Investors who cut their positions worried over the possibility of a prolonged crisis in Ukraine and its impact on the Indian economy, lost Rs 13.4 lakh crore in a day as market capitalisation declined to Rs 242.24 lakh crore.

While foreign investors pulled out over Rs 6,400 crore, domestic institutions  pumped in Rs 7,600 crore on Thursday. All sectoral indices suffered huge losses with the realty index crashing 7.27 per cent, bank 5.53 per cent, auto 6.05 per cent, IT 4.58 per cent and energy 5.02 per cent. Small-cap index plummeted 5.77 per cent and mid-cap index by 5.53 per cent due to heavy losses. The volatility index, VIX, rose 30 per cent, the most since September 2016.

According to Nilesh Shah, group president & MD, Kotak Mahindra Asset Management Company, it’s difficult to predict the bottom of the market in a scenario like war. “Events will shape the movement. The best thing for an investor is to follow asset allocation principles. This is likely to be a buy on dip market albeit with lot of volatility in the near term,” Shah said.

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Analysts said investors should stay invested if they have long-term investment plan and mutual fund investors should continue SIP without breaking investment. On the other hand, the correction will give an opportunity to investors to pick up good quality stocks at attractive levels. “Investors should wait and watch the unfolding situation before taking any major commitments. Buying should be confined to stocks/segments which are fairly valued or have good earnings visibility,” said VK Vijayakumar, chief investment strategist, Geojit Financial.

Russian markets crash

The rouble-denominated MOEX stock index slumped 43.3 per cent intra-day before recovering to close 25 per cent down, at below 2,300.

The rouble eased 3.8 per cent to 84.27 against the dollar as of 0932 GMT , having earlier hit a record low of 89.60 in highly volatile trading.

On Wall Street, As of 10:00 am ET, the Dow Jones was down 646.26 points, or 1.95 per cent, at 32,485.50 while the Nasdaq Composite was down 177.33 points, or 1.36 per cent, at 12,860.16.

Oil prices jumped on Thursday, with Brent rising above $105 a barrel for the first time since 2014. Brent crude rose $7, or 7.2 per cent, to $103.84 a barrel by 11:39 am ET, after touching a high of $105.79.

Re falls 99p, gold surges

The rupee plunged by 99 paise to close at 75.60 against the US dollar after Russia launched military operations against Ukraine. Sustained foreign fund outflows, heavy selling in domestic equities and elevated crude oil prices weighed on investor sentiment, analysts said.

Gold, a safe haven asset, jumped to 13-month high. Gold rate surged Rs 1,656 to Rs 51,627 per 10 gram while silver jumped Rs 2,350 to Rs 66,267 per kg. In international spot market, gold price breached its $1,925 hurdle and hit $1,950 per ounce levels, around a 13-month high.