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By Malvika Gurung
Investing.com — A day after returning to trade on Wednesday, Indian stocks slumped, mirroring an overnight fall on Wall Street, along with negative Asian cues, disappointing GDP growth in Q3 FY22, and soaring oil prices, led by escalating tensions between Russia and Ukraine.
As a result, global and domestic markets fell freely on Wednesday, as the Western nations imposed fresh stricter sanctions on Russian banks, to control its invasion of Ukraine.
Indian benchmark indices and widened their opening losses in the session while paring marginally in the late session, trading 1.3% and 1.55% lower at 3:05 pm.
Besides the Russia-Ukraine crisis, here are the top 3 factors causing the Indian markets to slump on Wednesday.
#1. Weak Global Cues from Wall Street & Asian Markets
The domestic market was closed on Tuesday, which witnessed a massive fall in the US market, as investors rushed to transfer their money to safer government bonds, lowering the 10-year Treasury bond yields to weekly lows at 1.73%.
Sell-offs were also witnessed in Asian markets as investors grew worried about the deepening Russia-Ukraine crisis.
#2. Soaring Crude Prices
The aggravating geopolitical tensions and aggressive sanctions imposed on Russia sent flying to multi-year highs on Wednesday.
Russia contributes to 8% of the global oil supply and even though the Western sanctions imposed on Russia does not affect oil supply, some traders steered away from Russian supplies and exports.
surged to $110/barrel, and as 85% of oil consumed by India is imported, a rally in oil prices would escalate inflationary pressures in the country.
#3. Disappointing GDP Result
The country’s GDP growth in Q3 FY22 was reported at 5.3% YoY, lower than the expected rate of 5.9%, led by unsatisfying government consumption and gross fixed capital formation.
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