It is rightly said that a war cannot benefit anything and Indian markets are no exception. Amid the current conflict between Russia and Ukraine, the Indian economy is on the verge of inflation. Countries and their respective economies are interrelated due to their dependency on one another for trade, investments, goods, and services. Eventually, a crucial geopolitical crisis in any country negatively impacts countries' markets.

Effect of Russian-Ukraine War on Indian Stock Market
The Sensex began the tradeoff with a whopping loss of 1,800 points. The Sectoral indices are trading in red with the realty, IT, telecom, and metal and auto stocks with a loss of up to 4%. Further, Tata Motor traded with a loss of 6%, TCS with 2.86%, RIL with 3.5%, and HDFC Bank with 2.85%.

The small-cap index sloughed 4.27% because of the hefty losses in the segment. The small-cap index funds are investment vehicles offering investors returns that reflect the index performance of stocks alongside capitalizations of the small market. Companies falling under the small-cap category generally have market caps ranging from around $300 million to $2 billion.

The rising concern amongst the Russian-Ukraine situation has pushed the Indian markets into the correction genre. Typically, the correction in the stock market refers to a drop of 10% in stocks from their recent-most peak. Moreover, there is a declination of 20% in NASDAQ from its peak

Why is the Indian economy getting affected by the ongoing crisis?
India has good trade relations with both Russia and Ukraine. Consequently, the ongoing war between them will negatively impact the Indian economy. It might experience another setback after the coronavirus pandemic if the geopolitical crisis worsens further.



What are the further prospects for the Indian investors in such an adverse situation?
As per analysts, Indian investors should stay intact in the stock market if they have long-term investment plans. Similarly, the mutual fund stockholders should stick to their SIP plans.
The correction mode of the stock market will provide an opportunity for individual investors to opt for the potential stocks at exceptional levels. It is recommendable for the investors to limit their buying to stock segments that are reasonably valued or have good earnings visibility.

The Negative Impact of the War on Indian Markets
• Exchange Rate: If the war between Russia and Ukraine continues, the exchange rate will get affected due to further depreciation of the rupee. Thus India's overall spending on trade will surge because of the exchange rate impact.
• Hike in Oil Prices: The crude oil's prices have risen to $101 per barrel and might increase further.
Moreover, diesel and petrol prices are believed to witness a hike after 10th March 2022.
• Rise in Inflation: The hike in the oil prices will also disturb the freight movement. Consequently, the essential food items such as fruits, vegetables, cereals, pulses, oil, and other necessities might get expensive, thus leading to inflation.

The Final Words
​​​​​​Aside from the stock market, India's auto sector will be affected, leading to a price hike in vehicles. India exports a considerable amount of metal from Russia. If there are any restrictions on metal exports, it can create significant obstacles for the country.