Russian President Vladimir Putin announced a military intervention in Ukraine to defend separatists in the country’s east, sending stock markets around the world into a frenzy.
He also threatened punishment against anyone who interferes with Russia’s activity in Ukraine.
The Indian stock market has dropped almost 3%, with the Sensex falling 1,878.75 points, or 3.28 percent, at 55353.31,
and the Nifty falling 550.60 points, or 3.23 percent, at 16,512.70, joining international peers.
In addition, Indraprastha Gas, Gujarat Gas, GAIL India, Petronet LNG, BPCL, Reliance Industries, Mahanagar Gas, and HPCL led the BSE oil and gas index lower by as much as 3.1 percent to a low of 16,933.
Traders are concerned that Russia’s intrusion on Ukraine, which is one of the world’s largest oil producers,
would result in more sanctions against Moscow, potentially affecting oil exports. The biggest influence on India will be through the indirect impact on global oil prices.
Globally the oil prices have risen by more than 30% since November, owing to a surge in demand as the global markets reopen as the COVID-19 epidemic faded resulting in higher vaccination rates.
Also,as per the recent report by ICICI Securities, “Russia accounts for 11% of global crude-oil exports. If sanctions take about 60% of this off global
markets (with China, Belarus and a few other customers possibly defying
the sanctions), world crude-oil supply would decline by 3 million barrels per day, and the Brent crude price would likely shoot above $110/bbl.”
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Image Credit: Wikimedia Commons,Green Kenya Investment Corp
