Indian shares plunged more than 3% and the rupee saw its worst drop in over three months on Thursday, after Russia attacked Ukraine, sending oil prices higher and stoking inflation worries.
Russian forces fired missiles at several cities in Ukraine and landed troops on its coast on Thursday, officials and media said, after President Vladimir Putin authorised what he called a special military operation.
The blue-chip NSE Nifty 50 stock index was down 3.01% at 16,549.8 by 0656 GMT and the S&P BSE Sensex was 2.99% lower at 55,521.45, after falling as much as 3.6% in its steepest drop since mid-April, 2021.
At the day's low, the Indian stock market was among the worst performers in Asia. The Nifty and the Sensex are set for their seventh day of losses, their worst run since March 2020.
The rupee weakened as much as 1% to 75.325 against the dollar, versus Wednesday's close of 74.555.
Inflation-related concerns on higher crude prices, and geopolitical tensions have led to safe-haven buying for the dollar index and is keeping the rupee under pressure, said Gaurang Somaiya, FX analyst at Motilal Oswal Financial Services.
"The looming risk of this (Ukraine) crisis is no more there, it is a reality today," said Aishvarya Dadheech, a fund manager at Ambit Asset Management.
Nifty's volatility index, which indicates the degree of volatility traders expect over the next 30 days in the Nifty 50, climbed to its highest since June 2020.
Oil prices, which breached $100 a barrel for the first time since 2014, added to selling pressure in India, the world's third-largest importer of oil. [O/R]
Meanwhile, aluminium producers Hindalco and National Aluminium rose as much as 1.7% and 1.9%, respectively, as prices of the metal hit a record high.
In Mumbai, all major sub-indexes were in negative territory, led by a more than 5% drop in the Nifty public sector bank index.
Tata Motors was among the biggest decliners on the Nifty, falling as much as 6.9%.
