The Indian equity benchmarks nosedived on Tuesday following weak global cues after geo-political tensions flared up between Russia and Ukraine. The Sensex plunged as much as 1,289 points and Nifty 50 index dropped below its important psychological level of 17,000 on the back 0f broad-based selling pressure.
As of 9:23 am, the Sensex fell 952 points to 56,732 and Nifty 50 index dropped 282 points or 1.64 per cent to 16,924.
Shares fell sharply in Asia on Tuesday after Russian President Vladimir Putin ordered troops into separatist regions of eastern Ukraine, suggesting a long-feared invasion was possibly underway.
Tokyo’s Nikkei 225 index dropped 2.2 per cent and the Hang Seng in Hong Kong fell 3.2 per cent in early trading Tuesday. Oil prices jumped, with U.S. crude up 2.8 per cent. The future for the S&P 500 dropped 1.7 per cent while the contract for the Dow industrials lost 1.5 per cent.
Advertisement
A vaguely worded decree signed by Putin cast the order for troops to move into eastern Ukraine as an effort to “maintain peace.” He also recognized the independence of the separatist regions, apparently dashing slim remaining hopes of averting a conflict that could cause massive casualties, energy shortages on the continent and economic chaos around the globe, news agency AP reported.
"The market is witnessing a sharp cut in early trade of Tuesday's trading session on the back of intense geopolitical tension. We are in monthly F&O expiry week therefore we could see a surge in volatility whereas March is going to be a very volatile month due to lots of events like geopolitical uncertainty, results of state elections, US Fed meeting, etc. The overall trend is bullish but we may have high volatility over the next month therefore short-term traders should remain light while long-term investors should look at this correction as a buying opportunity," said Parth Nyati, founder at Tradingo.
Advertisement
Back home, relentless selling by foreign institutional investors (FIIs) also added to the selling pressure. FIIs sold shares worth Rs 2,262 crore while domestic institutional investors bought shares worth Rs 2,393 crore on Monday.
Selling pressure was broad-based as all the 15 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty PSU Bank index's over 2 per cent decline. Nifty Metal, Private Bank, Bank, Financial Services, Media and Oil & Gas indices also fell between 1.5-2 per cent.
Broader markets were also facing selling pressure as Nifty Midcap 100 index dropped 1.54 per cent and Nifty Smallcap 100 index tumbled 2.2 per cent.
All the constituents in the Nifty 50 basket of shares were trading lower led by Larsen & Toubro's over 3 per cent decline. UPL, Coal India, Power Grid, Tata Consultancy Services, IndusInd Bank, HDFC Life, Tata Motors, Adani Ports, Asian Paints, NTPC and Dr Reddy's Labs also fell between 2.5-3 per cent.
The overall market breadth was extremely negative as 2,575 shares were advancing while a mere 316 shares were declining on the BSE.
Just one email a week