Financial Risk Management

Russia-Ukraine War: An Opportunity Amid Crisis for Indian Investors

Article Details

Pub. Date	: Mar, 2022
Product Name	: The IUP Journal of Financial Risk Management
Product Type	: Article
Product Code	: IJFRM040322
Author Name	: Subhajit Chakraborty* and Pritha Sarkar**
Availability	: YES
Subject/Domain	: Finance Management
Download Format	: PDF Format
No. of Pages	: 6

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Abstract

The paper attempts to examine the gray areas of Indian stock market in the light of the complexities arising on account of the Russia-Ukraine war. It has been a while since the actual war began, and the Indian economy and stock bourses are still facing severe repercussions in trading activities. The conflict between the two nations has affected the economy, as the Indian capital market, along with its indexes, viz., Sensex and Nifty, finds itself in the red. The equity markets are facing a downturn of 7%, extending to an amount of more than 13 lakh cr, which means serious trouble. The paper attempts to demonstrate the impact of the ongoing crisis on the investments and returns of investors. It also focuses on how the domestic stock bourse can tackle the upcoming challenges and on investor behavior.

Introduction

The global economy is facing a tough situation due to the Covid-19 pandemic, followed by the ongoing Russia-Ukraine war, which has severely affected the varied aspects of the economy. At this juncture, the Russia-Ukraine war is posing a threat to the major stock exchanges of India. There has been a serious drop in the market cap of the listed shares on the Bombay Stock Exchange to an extent of 6.28 lakh cr, as the wealth of the investors diminished to 240.57 lakh cr from 246.85 lakh cr. The surge in the cost of brent crude oil also caused the Sensex and Nifty 50 to fall, each by 1,611.64 and 445.80 points, respectively.1 Similar surge in prices was also seen on the US crude oil. Also, the price was additionally hiked due to the closure of two oil fields in Libya. However, the adverse impact on the stock exchanges is not something new, as in 2021, the same scenario was witnessed due to the Afghanistan crisis.2 When situations are contagious, our stock markets cannot remain unaffected.

Russia-Ukraine War: Impact on Indian Economy
The ongoing crisis between Ukraine and Russia had a strong impact on the investors' investment and returns. Equity shareholders of the major listed companies on NSE and BSE