Indian shares see biggest one-day fall in 10 months

Indian shares recorded their biggest one-day percentage drop in 10 months on Monday, tracking a selloff in global markets as investors turned jittery over escalating tensions between Russia and the West over Ukraine.

The NSE Nifty 50 index (.NSEI) ended 3.06 per cent lower at 16,842.80, while the S&P BSE Sensex (.BSESN) dropped 3 per cent to 56,405.84, both marking their worst day since mid-April 2021.

The Nifty volatility index (.NIFVIX), which indicates the degree of volatility traders expect over the next 30 days, jumped 25.52 per cent.

Warnings that Russia could invade Ukraine at any time sent global shares skidding and oil prices to seven-year peaks.

"It (the threat of war) is likely to have a short-term impact since the risk of actual elongated war between two nuclear powers is quite limited," said TIW Private Equity managing partner Mohit Ralhan.

"It is expected the tensions will dissipate through geopolitical manoeuvres over the next few weeks, but market volatility will be high."

Investors are also awaiting India's January retail inflation data, due later in the day.

If crude oil remains at levels close to $95 per barrel for a while, continued accommodative monetary stance would be difficult, said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

The Nifty banking index (.NSEBANK) fell 4.2 per cent, extending losses for a second session, while the public sector banking index (.NIFTYPSU) slumped 6 per cent.

Tata Consultancy Services (TCS.NS) was the lone gainer on the Nifty, adding 1.05 per cent, while all sectoral indexes ended in the red.

State-run Life Insurance Corp of India filed draft papers with the market regulator on Sunday to sell 5 per cent of its shares to potentially raise nearly $8 billion, dwarfing the biggest IPO in Asia's third-largest economy by a considerable margin.

Meanwhile, India's federal investigation agency filed a police complaint against ABG Shipyard Ltd and its promoters, accusing it of defrauding lenders of 228.42 billion rupees.