In early morning trade on Monday, the stock market lost almost 2% as Indian equities joined a global sell-off prompted by increasing tensions between Russia and the West over Ukraine, while banking stocks continued to fall.
SENSEX, NIFTY Tank
The Nifty 50 index of the NSE declined 2% to 17,029, while the S&P BSE Sensex slid 1.9 percent to 57,023.63. The Nifty volatility index, which measures how much volatility traders forecast in the Nifty50 index over the next 30 days, increased by as high as 21.61 percent.
Why Stock Market is down
“The market correction in the United States is part of a larger worldwide trend. Due to increasing inflation and tensions between Russia and Ukraine, foreign institutional investors are selling. The market is jittery as a result of this “According to a Reuters article, Saurabh Jain, assistant vice president at SMC Securities, stated.
According to Reuters, energy and metal costs are rising, which is effectively fanning inflationary pressure across the global economy.
Inflation and Crude Oil
Investors will be watching India’s January retail inflation figures, which will be released later in the day.
Higher crude oil prices are another key macro issue for India, and if it stays at $95 per barrel for an extended period, the accommodative monetary posture will be tough to maintain, according to V K Vijayakumar, chief investment analyst at Geojit Financial Services.
Key Developments
Meanwhile, ABG Shipyard Ltd and its promoters have been charged with cheating lenders of 228.42 billion rupees by India’s government investigation agency.
The banking index on the Nifty lost 2.9 percent, while the public sector banking index fell 3.4 percent.
On Sunday, the state-run Life Insurance Corporation of India filed draught documents with the market regulator to sell 5% of its stock in order to raise about $8 billion, dwarfing the previous largest IPO in Asia’s third-largest economy by a significant margin.
Individual stocks soared as high as 4.9 percent as rising crude prices lifted driller Oil and Natural Gas Corp’s quarterly profit by seven-fold.