Stocks slump, rupee slides as Russia-Ukraine conflict shells markets
Photo: AP
New Delhi: Markets were awash in red and the Indian currency plummeted against the dollar on Thursday amid Russia’s attack on Ukraine pushing investors to seek refuge in safe-haven assets.
Gold as well as crude oil prices surged, with the latter even crossing the USD 105 per barrel mark. Markets in Asia and Europe were also deep in the negative territory.
Investors’ wealth eroded by a whopping over Rs 13.44 lakh crore on Thursday.
The 30-share BSE gauge plunged about 2,850 points during the session before closing at 54,529.91, registering a massive fall of 2,702.15 points or 4.72 per cent. This was its biggest decline since March 23, 2020, and the fourth-worst fall ever in absolute terms.
Likewise, the NSE barometer Nifty nosedived 815.30 points or 4.78 per cent to end at 16,247.95.
At the interbank foreign exchange market, the rupee opened at 75.02 against the American dollar but later dropped to a low of 75.75 against the greenback. The local unit finally finished at 99 paise to close at 75.60 from the previous close.
Meanwhile, global oil benchmark Brent crude futures jumped 8.68 per cent to USD 105.25 per barrel.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 1.02 per cent to 97.16. Gold prices in the national capital rallied by Rs 1,656 to Rs 51,627 per 10 grams on Thursday on the back of safe-haven buying and sharp depreciation of rupee amid the Russia-Ukraine conflict.
HDFC Securities Senior Analyst (Commodities) Tapan Patel said, “spot prices for 24 carat gold at Delhi surged by Rs 1,656 in line with gains in COMEX gold prices along with rupee depreciation”. He also said that gold prices rallied on safe-haven buying along with the dollar on geopolitical risk fearing severe sanctions on Russia and possible disruption of supplies of commodities.
“It is 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 a lot of volatility in the near-term,” Nilesh Shah, Group President & MD, Kotak Mahindra Asset Management Company.
The situation in Ukraine deteriorated after Russian President Vladimir Putin announced a military operation in Ukraine, triggering serious concerns over the possibility of a full-scale military confrontation between the two countries.
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