Investors Lose Rs 10 Lakh Crore As Putin Announces Military Action In Ukraine

Benchmark indices came crashing down in trade as Russian President Vladimir Putin, in an early Thursday morning address in Moscow, announced that Russia would launch a military action in Ukraine. NBC News reported that explosions were heard in Kyiv, the Ukrainian capital.

The Sensex along with all of the global markets were seeing a bloodbath with investor losing as much as Rs 10 lakh crores. The Sensex was down a huge 1600 points, while the Nifty dropped a mammoth 483 points in trade.

All of the global markets were down 2% to 3%. Crude oil prices surged by almost 3% and hit $95 a barrel, as Russia is one of the biggest producers of oil and gas in the world.

All of the Sensex and Nifty constituents were deep in the red. Among the stocks that lost big were Tata Motors, which was down 6%, while Bharti Airtel, Adani Ports and Tata Steel were among the other big losers in trade. Heavyweights, ICICI Bank and Reliance Industries too lost close to 3.5% in trade.

Analysts are now expecting a further downside in the markets in the coming days, should tensions mount, which are most likely. For India, surging crude prices is likely to push fuel prices higher and feed into inflation.

Says Mohit Ralhan, Managing Partner at TIW Capital Group, "The market has gone down as investors weigh the impact of Russia Ukraine crisis. Russia has launched a military action targeting the military infrastructure of Ukraine and it may lead to a larger scale invasion of Ukraine with the risk of USA and Europe getting embroiled militarily as well. Additionally, the price of oil crossed US$100 per barrel mark stoking inflation fears in oil importing countries like India. The economies around the world are still recovering from COVID pandemic and can't afford the consequences of this war.

This is also the reason; we believe that the world leaders would work towards deescalating the situation and avoid a full-blown war through diplomatic channels. But definitely the risks have gone up, since the military situations typically unfolds very fast. The India VIX has already crossed 30 as the market is expected to swing wildly on both sides reacting to all incoming news. It's time to be extremely cautious in the markets and the best possible action seems to be wait & watch for a clearer picture to emerge."

While all of the stocks plunged, the maximum damage was seen in stocks from the metal and the banking space. These set of stocks have been rallying in the last few quarters.

Investors are advised to stay away from the volatility and only buy when things begin to calm down. It is unlikely that the markets would recover any time soon as military action can be a long drawn affair.