Sensex, Nifty slip below 200-DMAs; investors lose Rs 6 lakh crore today

NEW DELHI: Benchmark indices broke below their 200-day moving averages amid the fifth day of fall on Dalal Street today, and in the process wiped nearly Rs 6 lakh crore off investor wealth.

The BSE market capitalisation hit a low of Rs 251.72 lakh crore in Tuesday's trade, which was down Rs 5.67 lakh crore over Monday's levels. Since February 16's closing value of Rs 262.19 lakh crore, stock investors have lost Rs 10.46 lakh crore in fortune.

On Tuesday, the BSE Sensex fell nearly 1,300 points intraday, falling below its crucial 200-day simple moving average. Nifty50, which tested 16,850 level at open, was also quoting below its crucial average.

The fresh round of selling was triggered by the Russian move to recognise two breakaway regions, Donetsk and Luhansk, in eastern Ukraine and the deployment of its troops there to "keep the peace".

"I recall a similar script was played by Russia in 2008 when the then Georgian government headed by pro-US President Sakaashvili was making similar noises as the current Ukrainian government of joining NATO and EU. The war between the Russia-backed separatists and Georgia was swiftly followed by recognition by Russia of South Ossetia and Abkhazia as independent, sovereign Republics," said independent analyst Ajay Bodke, who warned about such a possibility in a February 16 note.

Bodke said: Then as now, Putin had said that NATO's enlargement towards Russia would be taken in Russia as a direct threat to the security of our country.

"Escalations in Ukraine tensions with Russia recognising two pro-Russian rebel regions have aggravated the crisis. The economic consequences are already visible in higher crude and gold prices. The situation remains fluid; we don't know whether the tensions will escalate or be contained from now on," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Stocks came crashing as oil prices surged 4 per cent, tracking an overnight double-digit fall for Russian stocks and heavy selling in Europe.

"Crude may remain volatile as market players assess risks associated with Russia, but the general bias may remain on the upside unless there are serious efforts to de-escalate tensions," said Ravindra Rao of Kotak Securities.

Concerns over Fed rate hikes and fresh geopolitical tensions have sent India VIX soaring to 26.90 level now from 16-odd levels at the beginning of this year. Foreign equity outflows during this period have topped the Rs 50,000 crore mark at Rs 51,703 crore. The fear gauge was up 17 per cent in the initial trade.