Russia Ukraine Crisis: Domestic stock markets fell more than 3% today, joining a worldwide stock sell-off as the situation between Russia and Ukraine worsened. What are the options for investors? What are the dangers that lie ahead?
Domestic stock markets fell almost 3% on Thursday morning, joining a worldwide stock sell-off as the worsening crisis between Russia and Ukraine and rising crude oil prices weighed on investors’ minds. The benchmark Sensex was 1,668 points lower at 55,563.92 and the NSE Nifty index was 488 points worse at 16,574.80 in intra-day trade at 10.20 a.m., after plummeting by nearly 2,000 points at one point. Concerned about the potential of a lengthy conflict in Ukraine and its influence on the Indian economy, investors reduced their stakes.
Brent oil surpassed the $100 mark as the Ukraine conflict worsened, and Asia-Pacific stocks slumped on fears of supply disruptions and penalties. Even as Russian President Vladimir Putin announced in a public speech that he has authorised a military campaign in Ukraine and NBC News reported explosions in Kyiv, gold, a safe haven asset in times of uncertainty, climbed 1% to $1,932.
Asia’s stock markets were down by as much as 3%. On Wednesday, the Dow Jones slid 1.38 percent and the Nasdaq sank 2.6 percent. “The geopolitical kettle is on the boil. “As if that weren’t enough, the Fed’s hawkish tone on rate hikes is putting market participants on edge,” one analyst said.
The Sensex started trading with a 1,800-point drop. All sectoral indexes are in the negative, with stocks in IT, telecom, real estate, auto, and metal selling at a loss of up to 4%. Tata Motors was down 6%, RIL was down 3.5 percent, TCS was down 2.86 percent, and HDFC Bank was down 2.85 percent. Due to the category’s hefty losses, the small-cap index fell 4.27 percent. “The financial markets have entered a correction phase as concerns over the escalating Ukraine conflict have grown.
The almost 20% drop in NASDAQ since its high is a strong sign of the correction that has begun. In addition, the safe haven gold rally to $1913 reflects the crises’ hazards, according to V K Vijayakumar, chief investment strategist at Geojit Financial Services.
According to analysts, if an investor has a long-term investment strategy, they should stay involved, and mutual fund investors should maintain their SIP plan without breaking it. The large downturn, on the other hand, will provide a chance for investors to purchase high-quality equities at appealing prices. “Investors should wait and see how the situation develops before making any significant decisions.” “Buying should be limited to parts of the stock market that are fairly valued or have solid earnings visibility,” Vijayakumar said.
If the Ukraine conflict worsens, the stock market is likely to suffer significant losses, as oil prices are predicted to remain high. While the US Federal Reserve will meet next month to decide whether to raise interest rates and tighten liquidity, there are predictions that the Fed would not do so aggressively. Another source of concern is the impact of rising crude oil prices on the Indian economy, which is occurring at a time when inflation is near 6%, well above the RBI’s upper range.
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