Stock markets plunged, and oil prices surged to nearly $102 a barrel Thursday after Russian President Vladimir Putin announced Russian military action in Ukraine.
The S&P BSE Sensex was down 1,614.07 points (2.82 per cent) at 55,617.99 while the Nifty 50 fell 476.85 points (2.79 per cent) to 16,586.40. Both the indices had opened around 3 per cent lower and slipped over 3.5 per cent within minutes of the opening bell with the BSE benchmark slipping to 55,147.73 while the NSE barometer hit a low of 16,453.65.
Oil prices jumped more than $4 on anxiety about possible disruptions of Russian supplies. The ruble fell 5% against the dollar.
Despite a surge in international prices, Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp – which together control more than 90% of the domestic market – have frozen petrol and diesel rates for over three months.
Analysts expect petrol and diesel prices to go up sharply in India after state elections end next month, adding pressure on the government and the central bank to take steps to contain inflation.
“Sanctions forcing Russia to supply less crude or natural gas would have substantial implications on oil prices and the global economy. Russia accounts for one in every 10 barrels of oil consumed globally, so it is a major player when it comes to the price of oil and it’s really going to hurt consumers at the petrol pumps,” said Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services.