Markets were awash in red and the Indian currency slumped against the dollar on Thursday amid Russia's attack on Ukraine pushing investors to seek refuge in safe-haven assets.
Gold as well as crude oil prices surged, with the latter even crossing the USD 102 per barrel mark.
Domestic stock market opened deep in the negative territory, tumbling over 1,700 points and eroding investors' wealth by more than Rs 8 lakh crore in less than an hour of start of trade on Thursday.
At 1245 hours, the 30-share Sensex was trading 1833 points or 3.20 per cent lower at 55,399.06 while the broader NSE Nifty fell 561.70 points, or 3.29 per cent, to 16,501.55.
At the interbank foreign exchange, the rupee opened at 75.02 against the US dollar, then slipped further to 75.33. At 1245 hours, it was trading at 75.26 against the dollar, registering a decline of 65 paise from the last close of 74.61.
Gold prices rallied on safe-haven buying along with the US dollar on deepening geopolitical risks and fears of severe sanctions on Russia and possible disruption of supplies of commodities.
Meanwhile, global oil benchmark Brent crude futures jumped 5.61 per cent to USD 102.27 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.38 per cent to 96.55.
Deepak Jasani, Head of Retail Research at HDFC Securities, said the increase in hostilities by Russia has expectedly spooked the global markets.
While a fall on Thursday is a reaction to this development, markets anyway have been factoring such a development. In that sense, a short-term bottom may happen over Thursday or Friday, he said.
"However, the repercussions of these actions in terms of impact on commodity prices, including crude, supply disruptions and the sanctions that can be levied by the western nations remains uncertain and could result in the next leg down after a brief recovery," Jasani said.
Asian bourses were also in the red amid investors turning risk-averse in the wake of rising uncertainties and possible fallout of the Russia-Ukraine conflict.
Tapan Patel, Senior Analyst (Commodities) at HDFC Securities, said gold prices rallied with MCX Gold April futures surging by 2.25 per cent to Rs 51,500 per 10 grams on Thursday.
"Spot Gold prices at COMEX are trading near USD 1,940 per ounce breaching near-term resistance of USD 1,920 per ounce while the next target seems at USD 1,970 per ounce on geopolitical risk. MCX Gold April prices are expected to touch Rs 52,500 in the near term above which can find resistance near Rs. 53,800 per 10 grams," he said.
Narendra Solanki, Head- Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers said investors should continue to hold growth stocks and let volatility pass.
"Markets would be keen to know how the Ukraine crisis evolves and what kind of counter-measures are announced by the West. Post that one could expect markets to stabilise. Investors could add stocks in a staggered manner once the market stabilizes and as a strategy should focus on domestic oriented businesses for now," he noted.