It's not just the fear of Russia invading Ukraine ⁠— here’s why India’s stock market was the worst hit in Asia

• Sensex and Nifty 50 ended the day 3% lower, more than any other benchmark index across all countries in Asia.
• Investors were risk averse all over but those in India had more things to worry about including high inflation and a big bank fraud.
• Check out the latest news and developments on Business Insider.

Valentine’s day began in India with news from Ukraine that took the wind out of stock market investors all over the world. The US was preparing fast to retaliate against a possible invasion of Ukraine by Russia.

Investors around the world took their money out of equities. However, among all the markets in Asia, India saw the biggest sell-off because there were a range of other issues worrying traders.

These included fresh inflation data, subdued factory output, a big bank fraud and the spike in crude oil prices. Real estate, metals, banks and auto stocks have lost the most in India.
“We are seeing continuous selling by FIIs while DIIs flows may also come down ahead of the big LIC IPO,” said Santosh Meena, head of research at Swastika Investmart.

Investors didn't just wake up to the possibility of a war. There was also the biggest bank fraud to contend with, and two of the country’s biggest banks had been hit by it.

Later in the day, there was also bad economic data to digest. The growth in India's industrial production fell to a 10-month low of 0.4% in December 2021, owing to a contraction in manufacturing,, said Gaurav Garg, head of research at CapitalVia Global Research.

The wholesale inflation across the country rose to 12.96% in January and has remained in the double digits for the tenth straight month since April 2021.

And, from the looks of it, it's going to get worse. While prices of petrol and diesel are already at near record levels in India, further rise in crude oil prices will inch the cost more up.

The cues from Europe weren't any better, leading to a sharper fall in Indian equity indices in the second half of the day.

Put a table of top European indices.

(With Inputs from IANS)

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