Stocks tank after Russia attacks Ukraine, Sensex falls most in 2 years

Sensex tanks over 2,700 points amid global meltdown; investors lose ₹13 lakh crore

Updated - February 24, 2022 09:27 pm IST

Published - February 24, 2022 04:46 pm IST - Mumbai:

A man watches a screen showing a news item featuring Russian President Vladimir Putin on the facade of the Bombay Stock Exchange (BSE) building in Mumbai, India on February 24, 2022.

A man watches a screen showing a news item featuring Russian President Vladimir Putin on the facade of the Bombay Stock Exchange (BSE) building in Mumbai, India on February 24, 2022. | Photo Credit: AP

India’s equity benchmarks fell the most in almost two years on Thursday after Russia’s pre-dawn attack on Ukraine sent crude oil soaring past $100 a barrel to a seven-year high and spurred concerns that the conflict that could fan inflation and retard growth in a global economy still struggling to recover from the COVID-19 pandemic. 

The S&P BSE Sensex crashed 2,702 points, or 4.72%, to 54,529.91. This was the Sensex’s 4th biggest fall by points and the most since March 23, 2020, when it had tanked by 3,934.72 points on the eve of the nationwide lockdown to check the spread of the novel coronavirus.

On Thursday banking, auto and technology stocks led the losses.

Among top losers were IndusInd Bank down 7.88%, M&M down 6.34%, Bajaj Finance down 6.02%, Axis Bank down 5.99%, Maruti down 5.75%.

The NSE Nifty 50 index too plunged 815.30 points or 4.78% to 16,247.95 points. 

The volatility is expected to continue said market analysts.

Vinod Nair, Head of Research at Geojit Financial Services, “It was a big surprise for the world market as it was not anticipating a war. It was expecting a diplomatic meet between Biden & Putin.”

“Markets around the globe plunged deep in red as the Ukraine crisis intensified with Russia’s invasion into Eastern Ukraine. Crude oil prices crossed $100 per barrel and elevated inflation risk,” he said.

Also read | Russia-Ukraine crisis | Top developments till now

Rahul Shah-Co-Head of Research at Equitymaster, “The markets are still expensive from a historical perspective so more correction cannot be ruled out. So, if one is looking to increase exposure meaningfully then this may still not be the right time to do so.”

“In fact, this may still be a good time to move out of fundamentally weak stocks that had gone up merely on hope and did not have the underlying fundamentals to justify their rise. For those invested in quality stocks, however, should stay put as the long-term India growth story is intact,” he added.

Ajit Mishra, VP - Research, Religare Broking Ltd said following the invasion Investits chose to move out of risky assets and preferred safe haven like gold. 

“Markets are rattled with the news of Russia’s attack on Ukraine and it may cascade further citing the further news updates. This fall has resulted in the breakdown of the consolidation range in the Nifty index and it might find support around the 15900-16,000 zone,” he added.

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research said if the conflict turns out to be a prolonged affair, crude oil prices would stay above USD 100 over the near term. 

Also read | Dissatisfied with Indian response: Ukraine envoy

“Clearly, this will have an impact on the domestic inflationary scenario where there are already significant undercurrents due to increasing pass through of higher commodity prices with improving demand in manufactured products and even services,” he said.

He added that many investors may now move a part of their financial savings into gold since “there is a risk of an underperformance of the equity markets in such a tense geo political scenario.”

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