Sensex crashes 778 points; Nifty below 16,550: Top reasons behind today's fall - Times of India

Sensex crashes 778 points; Nifty below 16,550: Top reasons behind today’s fall – Times of India


NEW DELHI: The ongoing conflict between Russia and Ukraine spooked markets yet again on Wednesday with the benchmark BSE sensex falling over 750 points.
The 30-share BSE index crashed 778 points or 1.38 per cent to close at 55,469; while the broader NSE Nifty settled 188 points or 1.12 per cent lower at 16,606.
Maruti, Dr Reddy’s, Asian Paints, ICICI Bank and HDFC twins were the top losers in sensex pack falling as much as 6 per cent.
While Tata Steel, Titan, Reliance and Nestle were the major gainers rising up to 5.54 per cent.
On the NSE platform, sub-indices Nifty Auto, Private Bank and Bank fell as much as 2.96 per cent.
Here are the top reasons:
* Escalating war situation
Russian forces had captured a Ukrainian port on Wednesday as the troops battled for another urban centre. Ukrainian President Volodymyr Zelenskyy said Moscow wanted to “erase” his country.
As the conflict intensified further on the seventh day of the invasion, the Russian army said it had taken control of the Black Sea port of Kherson in southern Ukraine.
Russian paratroopers also landed in Kharkiv, Ukraine’s second-biggest city, triggering clashes in the streets, Ukrainian forces said.
* Oil at record high
Oil prices rose despite an agreement by the United States and other major governments in the International Energy Agency (IEA) to release 60 million barrels from strategic reserves to stabilize supply.
In afternoon Asian trade, Brent rose as high as $113.02 and WTI peaked at $111.50.
The disruption in supply chains has led to fears that top oil exporter Saudi Arabia may sharply hike prices of crude for Asia in April.
* Weak global cues
Global stock markets slid and oil prices surged more than $7 per barrel as Russian forces stepped up attacks on Ukrainian cities.
Frankfurt, Shanghai, Tokyo and Paris declined as President Vladimir Putin’s invasion fed fears of global economic turmoil.
On Wall Street, the Dow Jones Industrial Average lost 1.8 per cent on Tuesday. The Nasdaq composite slid 1.6 per cent.
In Asia, the Nikkei 225 in Tokyo lost 1.7 per cent to 26,393.03 and the Shanghai Composite Index shed 0.1 per cent to 3,484.19.
* Inflation fears
According to economists, Asian countries are less exposed to the war than Europe but those that need imported oil will be hit by rising global prices, adding to inflationary pressures and depressing business and consumer activity.
The attack on Ukraine and Russian threats of retaliation in response to Western sanctions also have roiled global markets for wheat and other commodities.
Russia is the No. 2 global crude exporter, after Saudi Arabia. Any potential disruption in supply could boost prices and add to persistent inflation pressures around the world.
Prices of wheat, of which both Russia and Ukraine are important exporters, have risen more than 20 per cent over one month ago.
Investors are shifting money into safe haven assets like government bonds, pushing up their market price and narrowing the yield, or the difference between the current price and the payout at maturity.
The yield on the 10-year Treasury was steady at 1.73 per cent after falling Tuesday by an unusually wide margin from Monday’s 1.83 per cent.
* GDP misses estimates
Data released by government showed that India’s gross domestic product (GDP) missed estimates in Q3.
The country’s economy expanded 5.4 per cent in the October-December quarter from a year earlier, according to official data, missing economists’ forecast of a 6 per cent growth.
(With inputs from agencies)


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