MUMBAI: On a day when Vladmir Putin launched what Ukraine termed a "full-scale" invasion, the Nifty and Sensex entered correction territory, trading 10.9% and 10.6% off their 52-week highs in October last year. Earlier, they had tanked 3% at opening.
The market enters correction mode when it’s 10% off its high and bear territory when it falls 20% from its high.
The Nifty traded at 16575.65 on Thursday, off 10.9% from its record high of 18604.45. The Sensex was down at 55609 off 10.6% from its record high of 62245.43.
Crude oil jumped almost Rs 800 a barrel on commodity exchange MCX, with Brent trading above the $102 a barrel at the time of writing. The rupee has tanked 56 paise to 75.11.
Market observers like Rohit Srivastava of IndiaCharts feels markets could correct another three percent in the "worst-case" scenario, which he defines as the West sanctioning Russia for the invasion.
That implies Nifty correcting to 16000 and Sensex to 53600. He caveats that his calculations could go "awry" in light of military retaliation against Russia by Ukraine or other world powers, which he deems "unlikely."
"It's like you buy on the sound of cannon and sell on the sound of trumpets, as of now. So, I guess it will be another day or two before things stabilise," said Hormuz Maloo, director AFco Investments.
Both analysts underscore that all bets will be off if the military action escalated into a full-blown war.
Underscoring the uncertain sentiment in the market fear gauge India Vix traded up 25% at 30.64 with a reading above 20 signalling high bearishness.
Tata Motors , Hero MotoCorp, IndusInd , Adani Ports and Tech M were the major heavyweights that were down between 4% and 6%.