Nifty joins global rout over Ukraine invasion

Tags: News

Sensex snaps five-day rally, slides 173 points

Nifty joins global rout over Ukraine invasion
India’s stock indices ended their five-day winning streak on Monday amid panic in the Russian market after Moscow seized control of a part of Ukraine, escalating tension between Russia and the west.

The Moscow exchange fell more than 10 per cent while its currency rouble traded at record lows versus the dollar and the euro on Monday.

Japan’s Nikkei dropped 1.27 per cent while Hong Kong’s Hang Seng shed 1.47 per cent. In comparison, the Indian market fared better with Sensex losing 0.82 per cent (173.47 points) to 20,946.65 while NSE’s broader Nifty index shed 0.88 per cent (55.50 points) to 6,221.45.

Escalating tensions in Ukraine rattled other markets as well. FTSE100 fell 1.18 per cent and Germany DAX was down 2.28 per cent while crude oil jumped 1.27 per cent.

US stock futures opened lower even as safe haven assets such as gold and silver climbed. Gold advanced to a more than four-month high in London, as concerns over a conflict between Russia and Ukraine boosted demand for a haven, Bloomberg reported.

“Geopolitical tensions surrounding Ukraine weighed heavily on global markets, including the Sensex. The ongoing conflict though likely to remain localised has led to risk aversion among equity markets,” said Sanjeev Zarbade, vice-president, private client group research, Kotak Securities.

The rupee fell the most in two weeks on concern of capital inflows, as the economic growth rate cooled. The Indian currency closed at 62.04 against the dollar, down 29 paise or 0.47 per cent.

“Q3FY14 GDP growth slowed down to 4.7 per cent year-on-year against our expectations of 4.8 per cent year-on-year and as compared with 4.8 per cent in the previous quarter leading to April-December 2013 growth of 4.6 per cent,” Karvy Stock Broking said in a report.

“Strong growth in the services sector contributed significantly to the growth in the economy in the third quarter, while manufacturing growth slumped by 1.9 per cent in Q3FY14,” it said.

Dr Reddy’s Labs, down 2.97 per cent, fell the most among Sensex constituents followed by BHEL (down 2.81 per cent to Rs 162.50), Sun Pharma (down 2.75 per cent to Rs 625.05) and M&M (down 2.22 per cent to Rs 951.85 apiece).

Vinod Nair, head of fundamental research at Geojit BNP Paribas Financial Services said: “Despite strong PMI numbers for February, markets today have moved south due to worries over Ukraine issue. As Ukraine is an important gateway for Russian energy supplies to its vital markets in Europe, the markets seem to be factoring the likely impact of higher oil prices on the economy. India’s reliance on imported crude could weigh down on the bourses in the near term.”

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