The Indian stock market witnessed a sharp fall today amid rising geopolitical tensions in the Middle East. The Sensex dropped over 900 points, while the Nifty tumbled more than 250 points, wiping out investor wealth worth INR 2 lakh crore in early trade.
By 10:30 am, the Sensex was down 739.16 points at 81,669, and the Nifty had declined 222.80 points to 24,890.30. The panic selling was largely triggered by a sudden spike in crude oil prices, a weaker rupee, and fears of a broader conflict between Iran, Israel, and now the US and Russia.
Market Breadth Weak
Of the 3,824 stocks traded on the BSE, 2,218 were in the red, while only 1,379 gained. A total of 210 shares hit the lower circuit, indicating a broad sell-off across sectors. Among the Sensex’s 30 stocks, 27 were in the red, with only BEL (+2.19%), Trent (+0.24%), and Adani Ports (+0.12%) showing gains.
What Caused the Crash?
- Middle-East Conflict Intensifies
Tensions escalated after America joined the Iran-Israel war, and Russia claimed several nations are ready to share nuclear arms with Iran. Iran’s Foreign Minister is also scheduled to meet Russian President Vladimir Putin today, heightening fears of a more intense military escalation.
- Strait of Hormuz Closure
Iran’s parliament has approved the closure of the Strait of Hormuz, a vital sea route that handles 30-40% of global crude supply. Following this, Brent crude jumped 2% to $78/barrel, and WTI crude rose 1.7% to $75/barrel, sparking panic over inflation and supply disruption.
- Rupee Depreciation
The Indian Rupee fell by 27 paise, trading at 86.82 per USD, amid strengthening of the US dollar and rising oil prices. The fall in the rupee further contributed to market uncertainty.
IT and Oil-Dependent Stocks Take a Hit
IT stocks and oil-import-dependent sectors were the worst hit today. Rising global crude prices have a direct impact on India’s current account, and a weaker rupee increases input costs for several industries.
