On Thursday, Indian markets plummeted as Russian President Vladimir Putin ordered military action in Ukraine. Massive explosions were heard in the Ukrainian city of Kyiv shortly after the declaration.
Sanctions were imposed on Russia by the US, and other western nations had little effect on Putin’s decision to declare war.
The Russia-Ukraine confrontation has been continuing and persistent since February 2014 regarding geopolitical considerations, and the scenario has now turned catastrophic.
The price of oil, which was steadily climbing in previous weeks as a result of the Russia-Ukraine war, has now surpassed $100 per barrel, owing to concerns that sanctions may damage Russia’s crude oil exports.
Given that India imports over 80% of its oil, the news is a significant setback for the nation.
Furthermore, the Russia-Ukraine situation has a significant influence on both Indian households and authorities. 90% of India’s sunflower oil shipments come from Ukraine and Russia combined.
After that, within Asian markets, Indian markets took the brunt of the damage. In addition, during the first hour of trading, the market capitalisation of BSE-listed businesses was reduced by $177 billion.
The price of aviation turbine fuel (ATF) has increased 19% to Rs 90,519 per KL from Rs 76,062 per KL on January 1 as a result of rising crude oil prices. The increase in ATF rates may have an impact on airline firms’ financial sheets, as ATF accounts for more than 35% of the cost of operating an airline in India.
In the early trading on February 24, shares of InterGlobe Aviation, the parent organisation of IndiGo Airlines, were trading nearly 7% down at Rs 1,894. In contrast, the baseline BSE Sensex was trading 2.91% less at 55,566 at around 11:05 a.m. (IST). SpiceJet, on either hand, dropped 4.12% at Rs 58.20.
The prospect of a full-fledged conflict has wreaked havoc on equities markets, which had already been reeling from FII selling, expectations of lower interest rates, high gasoline costs, and increasing inflation.