Global Markets Crash Amidst Fear Of War Between Ukraine And Russia

New Delhi: Indian Share Market fell sharply on Monday. BSE Sensex closed below 57,500, falling 1,545 points and Nifty50 fell over 450 points to close at 17,150. According to a report by Bhaskar, in the past 5 days, over Rs 19.5 lakh crore have been eroded from the Indian share market. The shares of Zomato, Paytm and Nykaa touched their lifetime lows, on Monday.Also Read – Share Market Today: Sensex Plunges Over 1,900 Points, Nifty At 14,000 As Bears Take Over. Zomato, Paytm Touch Lifetime Lows

But this trend was noticed not only in India. Share markets across the globe fell amidst the rising crude oil prices and the rising fear of war between Ukraine and Russia. The USA’s Dow Jones fell over 4.5 per cent, Japan’s Nikkei 225 fell close to 2 per cent and Europe’s FTSE 100 fell over 0.5 per cent. Only the share markets in China rose, against the global trend.

Why Did Global Share Markets Fall?

Rising Tensions Between Ukraine and Russia

• Russia has been consolidating its troops along the Ukraine border for quite some time now.
• The tussle around the Donbas region in Eastern Ukraine has escalated to a worrying level.
• The USA has been trying to ease the tensions but Russian President Vladimir Putin has not yet agreed to any terms and conditions.
• Putin is objecting against the admission of Ukraine in NATO.
• According to various media reports, experts believe that a war between the two countries may be possible. This has shaken the global markets.

Crude Oil Prices

• The crude oil prices have touched their highest levels since October 2014.
• The oil was trading at $88.76 per barrel.
• This has pushed the inflation rates to a new level.
• Inflation figures in the USA have been the highest in the last 32 years.

Interest Rates By Federal Reserve

• Due to high retail inflation rates in the USA, the Federal Reserve is soon expected to raise the interest rates.
• This may lead to a correction in the global markets as the money will find its way into bank accounts from the stock exchanges.
• This too has led to instability in the global markets.

FPI Outflow

• FPIs in India have been on a selling spree for the past week.
• Between January 19th and 24th, FPIs withdrew Rs 10,350 crore from Indian markets, according to the Bhaskar report.
• Out of this, over Rs 7,000 crore have been withdrawn in the last two days only.

What to expect next?

The report also added that till the Budget 2022 is presented, Indian markets will be guided by global trends. After February 1, 2022, when the Union Budget 2022 is presented by Finance Minister Nirmala Sitharaman, the markets may be guided by the new policy decisions. Although, the bear market may prove beneficial for the people looking for an opportunity to invest in large-cap companies.