For Indian stocks, it was a 'bad Tuesday' morning, with the major indexes falling more than 2% at the opening bell after Russia recognised two rebel-controlled districts of Ukraine, exacerbating the simmering crisis that has engulfed markets around the world for many days.
The tsunami produced by rising tensions and reports of impending conflict has wiped out Rs 9.1 lakh crore from the market capitalization of BSE-listed companies in just five days.
The last time the Indian markets closed in the green was on February 16, but the decline has continued since then.
The 30-stock BSE Sensex fell 1,245 points to 56,439 on Tuesday, while the Nifty fell 359 points to 16,848 after breaching the important 17,000 milestone. During the day, all other Asian indices were down more than 1%.
The NSE's sectors indices were all down, with the media and public sector banks having the biggest losers. The broader markets were down 1.2 to 2.2 percent as well.
The India VIX, which measures how much volatility traders forecast in the next 30 days, increased by 17.5 percent from 22.9 to 26.9.
"Overnight, safe havens have rallied. At the longer end of the yield curve, US treasury yields have fallen roughly 7-8 basis points. Given the risks to growth posed by global tensions, the Fed may need to rethink its tightening intentions, according to IFA Global in a morning note on Tuesday.
A rise in crude prices is India's biggest macro headwind. The Reserve Bank of India will be forced to alter its dovish monetary policy due to the inflationary consequences. Due to risk aversion, crude oil has risen 3.5 percent to $97 a barrel, while gold has crossed the $1,900 level.
"The economic ramifications are obvious in rising crude and gold prices, and the situation remains volatile," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Buying chances may surface during this drop," Vijaykumar added, "but investors need not rush in to buy because FIIs are likely to continue selling." "As a result, the values of some high-quality financials will continue to fall." In this part, dabbling is permissible."
Experts believe that because this is the monthly F&O expiry week, there will be a spike in volatility, and that March will be even more unpredictable as a result of global uncertainties, state election results, and the US Fed meeting.
"The overall trend is favourable, but we may see high volatility over the next month," said Parth Nyati, Founder of Tradingo. "Short-term traders should remain light, but long-term investors should look at this correction as a buying opportunity."
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