Dalal Street saw sharp selling pressure on Friday morning. Investors turned cautious amid lingering uncertainty around the Iran conflict. This came despite US President Donald Trump halting strikes on Iran’s energy sites until April 6.
The Sensex fell over 1,000 points to 74,272.68. The Nifty 50 dropped nearly 300 points to 23,009 in early trade. The sharp fall signals a clear shift in sentiment. Investors are now focusing more on broader risks rather than short-term relief signals.
Why markets are falling
Weak global cues weigh: Global markets remained under pressure. Asian peers such as Kospi and Nikkei 225 dropped up to 2 per cent. This followed a similar 2 per cent fall in the S&P 500 and Nasdaq Composite overnight. Persistent uncertainty around the West Asia conflict kept volatility high.
Rupee hits fresh record low: The Indian rupee added to the pressure. It weakened to 94.1575 against the dollar. This is below its earlier record low of 93.98 hit earlier this week. Since the conflict began last month, the rupee has fallen around 3.5 per cent.
Conflicting signals on Iran conflict: Mixed reports continue to unsettle investors. While Trump indicated a pause in escalation and progress in talks with Iran, there is no concrete breakthrough yet. At the same time, reports suggest Israel may intensify efforts to weaken Iran’s military infrastructure before the conflict ends. This divergence is keeping risk appetite low.
Catch-up selloff after holiday: Domestic markets were shut on Ram Navami on Thursday. Global markets reacted in real time during this period. As a result, Indian markets are now catching up with the negative sentiment in a single session.
Crude oil stays elevated: Oil prices remain a key concern. Brent Crude surged to around $108 per barrel. Rising crude increases inflation risks and widens India’s current account deficit. This typically weighs on equities.
Foreign investors continue to exit: Foreign capital outflows remain heavy. As per National Securities Depository Limited (NSDL), foreign portfolio investors have pulled out Rs 1,23,688 crore from Indian markets in March till March 25.
Data also showed a sharp erosion in FPI holdings. Equity assets fell by $79 billion to $710 billion in the fortnight ended March 15. This is the steepest drop in at least six years. It is even sharper than the fall seen during the COVID-19 pandemic-led selloff in 2020.