Indian shares plunge 3% as Russian forces invade Ukraine

BENGALURU — Indian shares tumbled 3% on Thursday as investors dumped risky assets after Russian troops fired missiles at several Ukrainian cities which Kiev said was a full-scale invasion, sending oil prices higher and stoking inflation worries.

The blue-chip NSE Nifty 50 index was down 3.02% at 16,548.20 by 0509 GMT and the S&P BSE Sensex was 3.07% lower at 55,477.67. Both indexes were headed for their longest losing run since March 2020, extending falls to a seventh session.

Russian forces fired missiles at several Ukrainian cities and landed troops on its south coast, after President Vladimir Putin authorized a military operation in eastern Ukraine.

“The looming risk of this crisis is no more there, it is a reality today,” said Aishvarya Dadheech, a fund manager at Ambit Asset Management in Mumbai, referring to the Russian invasion of Ukraine.

“We have seen historically that with a crisis like this, the worst possible impact would be the drive in commodity prices, which for India will be on the adverse side as it could take inflation higher.”

Nifty’s volatility index, which indicates the degree of volatility traders expect over the next 30 days in the Nifty 50, climbed to its highest since June 2020.

Oil breached $100 a barrel for the first time since 2014 as concerns grew that a war in Europe could disrupt global energy supplies.

India is the world’s third-largest importer of oil, and high global prices percolate through the economy and hurt consumers, while also widening the country’s current account deficit.

In Mumbai, Nifty’s major sub-indexes were in negative territory, with the Auto index, the public sector bank index and the energy index shedding more than 3% each.

Among individual stocks, cell tower firm Indus Towers Ltd plunged as much as 14.4%, after Britain’s Vodafone Group Plc said it was looking to sell its entire 28.1% stake in the company. (Reporting by Rama Venkat in Bengaluru; Editing by Subhranshu Sahu)