Mumbai: The BSE benchmark Sensex tanked over 1,000 points and the NSE Nifty cracked below the key 17,000-level in opening deals on Tuesday, mirroring a rout in the global equity markets.
The Sensex was trading 1,015 points or 1.76% lower at 56,668.60, and the Nifty quoted 285.40 points or 1.66% lower at 16,921.25 -- extending their losses to the fifth session in a row.
All the 30 Sensex constituents were trading with significant losses.
"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," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
The biggest macro headwind for India is crude racing to USD 97 a barrel, he said, adding that the inflationary consequence of this will force the RBI to abandon its dovish monetary stance.
Continuing their selling spree, foreign institutional investors sold shares worth Rs 2,261.90 crore in the Indian capital market on Monday, exchange data showed.
Other Asian bourses on Tuesday followed the overnight Wall Street rout and massive selloffs in European equities triggered by the Russia-Ukraine standoff.
Tokyo's Nikkei 225 index dropped 2.2% and the Hang Seng in Hong Kong fell 3.2% in early trading Tuesday. Oil prices jumped, with U.S. crude up 2.8per cent. The future for the S&P 500 dropped 1.7% while the contract for the Dow industrials lost 1.5%.
U.S. markets were closed on Monday for Presidents Day.
In Europe, shares slipped Monday as investors awaited developments in the Ukraine crisis. Germany's DAX gave up 2.1%. In Paris, the CAC 40 in Paris declined 2%. Britain's FTSE 100 fell 0.3per cent.
Russia's MOEX index dropped nearly 11%. The ruble was down 3.2% against the U.S. dollar.
Western powers fear Russia might use skirmishes in Ukraine's eastern regions as a pretext for an attack on the democracy, which has defied Moscow's attempts to pull it back into its orbit.
A vaguely worded decree signed by Putin cast the order for troops to move into eastern Ukraine as an effort to maintain peace." He also recognised the independence of the separatist regions, apparently dashing slim remaining hopes of averting a conflict that could cause massive casualties, energy shortages on the continent and economic chaos around the globe.
The White House issued an executive order to prohibit US investment and trade in the separatist regions, and additional measures likely sanctions were to be announced Tuesday.
Russia is a major energy producer and the tensions have led to extremely volatile energy prices.
US benchmark crude oil advanced USD2.42 to USD92.63 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international pricing basis, added USD1.38 to USD96.77 per barrel.
The tensions in Eastern Europe have added to worries over how the world's central banks, especially the U.S. Federal Reserve, will act to counter surging inflation
Outbreaks of coronavirus fueled by the highly contagious omicron variant are another worry.
On Wall Street on Friday, stocks capped a week of volatile trading on Wall Street with a broad sell-off.
The S&P 500 and Dow Jones Industrial Average both slipped 0.7%. The Nasdaq composite bore the brunt of the selling, skidding 1.2%. Small company stocks also fell, with the Russell 2000 index down 0.9%.
Treasury yields have fallen as investors shift money into the safety of US bonds. The yield on the 10-year Treasury, which affects rates on mortgages and other consumer loans, sank to 1.85% by early Tuesday from 1.93% cent on Monday.
In currency trading, the US dollar slipped to 114.62 Japanese yen from 114.74 yen late Monday. The euro fell to USD1.1300 from USD1.1312.
In a sign of aggravating geopolitical crisis in eastern Europe, Russian President Vladimir Putin has recognised the independence of separatist regions in eastern Ukraine.
Putin's announcement comes after a meeting of the Presidential Security Council and paves the way for Russia to openly send troops and weapons to the long-running conflict pitting Ukrainian forces against Moscow-backed rebels.
Meanwhile, India has also expressed deep concerns over the escalation of tension along the Russia-Ukraine border and said the developments have the potential to undermine the peace and security of the region.
Tracking the Ukraine crisis, Brent crude futures rose 4% to USD 97.35, the highest since September 2014. US stocks fell over 2% on Tuesday. (With inputs from agencies)