New Delhi (TIP)-Investors bailed out of risky assets, sending stocks crashing after Russian President Vladimir Putin’s troops invaded Ukraine. On Thursday, the exodus from stocks wiped out Rs1.3 lakh crore in investor wealth on Indian stock markets. But the bad news for stocks was a boon for safer assets such as gold and government bonds. Crude oil surged past the $100 mark amid expectations of tighter supply. India’s benchmark indices Sensex and Nifty tumbled, ending 4.72% and 4.78% lower respectively, one of the sharpest daily declines in nearly two years. The declines put the indices in correction territory—defined as a drop of at least 10% from a recent peak. The Sensex hit a record high of 62,245.43 on October 19. A near-6% decline was recorded on 4 May 2020 after the government extended the nationwide lockdown and a flare-up in US-China tensions. The Russian invasion has triggered the worst security crisis in Europe since World War II. The attack on Ukraine heightens the pressure on the global economy already reeling from Covid and galloping inflation. Investors fear the unfolding crisis will further increase raw material and energy costs. Sanctions against Russia by Western powers are likely to isolate the erstwhile superpower, a major producer of oil and commodities.

Global markets, too, saw deep corrections. Among Asian markets, the Hang Seng, Taiwan, Nikkei, Shanghai Composite, Jakarta Composite ended the day 1.48-3.21% lower. “The world can ill-afford further disruption in trade and commodities when Covid has already weakened sovereign balance sheets,” said Amar Ambani, head of institutional equities, Yes Securities.

Brent crude hit $105 a barrel, a level not seen since August 2014, adding to the worries.

S&P Global Platts Analytics said $100 oil aggravates pain as Asia’s top oil importers are dependent on imports for 70-100% of their needs. “High oil prices will dampen demand and undermine the fragile economic recovery,” said Lim Jit Yang, adviser for oil markets at S&P Global Platts Analytics.

The concerns are likely to remain elevated. “Crude could stay over $100 a barrel in the medium term unless Opec hikes output,” said Hetal Gandhi, director, Crisil Research. Opec members have failed to meet targets over the past three months.

Gold hit highest level in over a year. As Russia invaded Ukraine, gold prices skyrocketed to their highest level in more than a year.

In India, the gold price  surged by Rs 1,400 , hitting the peak of Rs 51,750 per 10 gms in the early morning trade. This comes amid steep fall in the stock market with Sensex down by 1432.50 points and Nifty reporting a slump of 410.70 points at the time of opening. Several Asian stock markets also plunged in the aftermath of the Russian invasion.

The bullion has witnessed a spike amid the increasing standoff between Russia and the West. Economic experts say gold is now being historically seen as a hedge against major economic and geopolitical ructions.

Spot gold jumped as much as 2.1% to $1,949.03 an ounce, the highest level since January 2021, and traded at $1,939.55 at 1:08 p.m. in Singapore, news website Bloomberg reported.         Source: HT