Today Indian market opened in red and both Sensex and Nifty were down more than 2% in early trade. Nifty had gone below the mark of 17000 points and the same Sensex had also come down from the mark of 57000 points to around 56650 points.
Rising inflation and crude oil prices
Crude oil prices increased sharply: The reason for this is also the border tensions between Russia and Ukraine because Russia is the largest exporter of oil in the world. Crude oil prices are at their 7-year record high and have crossed more than $ 95.69 per barrel.
You already know that almost all the economic activities and industries depend on oil, so due to the rise in the price of crude oil, the price of goods and services increases, and inflation increases.
It will also have a huge impact on the Indian economy and market as India is a net importer of crude oil and rising oil prices will affect the overall economy and may also increase the fiscal deficit.
ABG Shipyard Limited fraud case
Negative sentiments spread in the Indian market. CBI has filed a fraud case against ABG Group’s flagship company ABG Shipyard Limited and its directors.
This company is involved in the business of shipbuilding and repair. According to the CBI, the company has committed fraud of Rs 22842 crore with 28 banks.
Many banks like SBI, ICICI Bank, IDBI Bank, Bank of Baroda, etc had landed money at ABG Shipyard, and hence today Nifty Bank and Nifty PSU Bank were also trading down 2.5% to 3%.
Border tension has been going on between Russia and Ukraine for a long time. In such a situation, many countries have also asked their citizens to leave Ukraine.
US President Mr. Biden has also been invited to visit Ukraine. But if Russia takes any kind of military action in Ukraine, then Western powers like European Union and the US can impose sanctions on Russia.
And it will also have an impact on the global market and the Indian economy. This is because Russia is a commodity export powerhouse, Russia is the largest exporter of crude oil and natural gas.
Apart from this, Russia is the key supplier of many metals like aluminum, copper, etc., and Agri products like wheat to many countries.
Therefore, due to the increasing tension between Russia and Ukraine, there is a fear sentiment going on in the global market and the market is reacting negatively.
In such a situation, big investors and institutions prefer to take out their capital from equity and invest in a safe haven such as bonds or gold.
And so the gold price is also at its 3 month high.
This article is only for education purpose and the author has his own views and research, so if you invest in these stocks then do it at your own risk and do the research yourself before investing.