The Sensex tumbled 1,710 points to 78,529, its lowest level since April 17 last year. The Nifty 50 declined nearly 477 points to trade at 24,389, marking the first time in nearly seven months that the index has fallen below the 24,400 mark.
The sharp decline wiped out around Rs 7.93 lakh crore from the total market capitalisation of all companies listed on the BSE, dragging it down to nearly Rs 449 lakh crore.
Shares of L&T, IndiGo, Adani Ports, Mahindra & Mahindra (M&M), and Bajaj Finance were among the top Sensex losers, declining 3-6%. In contrast, BEL, Infosys, and HCL Tech were among the early gainers.
Global markets remained weak, with Japan’s Nikkei 225 crashing more than 3% and South Korea’s Kospi plunging around 8%. Hong Kong’s Hang Seng declined over 2%.
Wall Street also ended lower on Tuesday, with the S&P 500 settling 0.9% down after falling as much as 2.5% on concerns about the war’s impact on the US economy. The Dow Jones Industrial Average closed 0.8% lower, while the Nasdaq Composite fell 1%.
Why stock market is falling? Top factors behind today’s crash
1) War in the Middle East escalates
The sharp decline in Indian equities comes amid an intensifying conflict in the Middle East that has rattled global markets and shows no signs of easing. US President Donald Trump on Tuesday said that whatever remains of the Iranian leadership had agreed to engage in negotiations, but added, “It’s too late.” He further claimed that Iran’s “air defence, Air Force, Navy and leadership are gone.”
Earlier, Trump said he expects the conflict to continue for four to five weeks. Tensions escalated over the weekend after the US and Israel conducted military strikes against Iran, reportedly killing its Supreme Leader, Ayatollah Ali Khamenei. Iran subsequently launched retaliatory attacks across several parts of the oil-rich region.
2) Crude oil prices soar after Strait of Hormuz closure
Brent crude surged more than $1 per barrel, rising 1.4% to $82.53 after closing at its highest level since January 2025 in the previous session. US West Texas Intermediate crude gained 79 cents, or 1.1%, to $75.37, after settling at its strongest level since June.
Oil prices jumped as tanker traffic through the Strait of Hormuz came to a halt following repeated attacks on vessels in the area. More than 20% of the world’s oil supply passes through the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
India’s oil ministry has said the country has adequate crude stocks to manage any short-term disruption arising from the Gulf conflict. However, a prolonged escalation is likely to keep prices under pressure.
Barclays, the UK’s second-largest bank, on Saturday raised its forecast for Brent crude futures to $100 per barrel. “Oil markets might have to face their worst fears. As things stand right now, we think Brent could hit $100 per barrel as the market grapples with the threat of potential supply disruption amid a spiralling security situation in the Middle East,” the bank said in a report.
3) Rupee falls to record low
The Indian rupee fell to a record low against the US dollar amid a sharp rise in crude oil prices and escalating geopolitical tensions, which weakened risk-on sentiment. The rupee declined to 92.0550, breaching its previous all-time low of 91.9875 per dollar hit in late January.
4) Strong FII selling weakens sentiment
Foreign institutional investors (FIIs) remained net sellers in the last session, offloading Indian equities worth Rs 3,295.64 crore on Friday, according to NSE data. While this does not reflect their positioning in today’s session, sustained FII selling has dampened overall sentiment.
Domestic institutional investors (DIIs), however, remained net buyers, purchasing Indian equities worth Rs 8,593.87 crore in the previous trading session.
What lies ahead?
With the war intensifying and crude prices rising, markets are entering a phase of heightened uncertainty, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. He noted that the duration of the conflict and the extent of the damage it could cause remain unclear.
“From India’s perspective, which imports around 85% of its oil requirements, the real concern is inflation and its impact on economic growth. From a market standpoint, the risks stem from a potentially widening trade deficit, a depreciating currency, higher inflation and possibly slower growth. If these fears materialise, corporate earnings will be affected. However, this scenario will play out only if the war drags on. If it ends within three to four weeks, conditions could normalise,” he said.
What should investors do?
Vijayakumar said history shows that panicking and exiting the market during periods of uncertainty is rarely the right approach. “Markets have an uncanny ability to surprise and climb walls of worry. Investors should remain invested and exercise patience. Those with a high risk appetite and a long-term horizon can use the correction to gradually accumulate high-quality stocks. Banking, pharmaceuticals, automobiles and defence could offer attractive long-term opportunities,” he added.