Stock Market Crash: The Indian stock market opened sharply lower on Monday, March 23. Weak global cues and rising geopolitical tensions hurt sentiment.
The BSE Sensex and Nifty 50 extended losses in early trade, with both benchmark indices falling more than 2 per cent.
The BSE Sensex plunged over 1,550 points to hit 72,977, while the Nifty 50 dropped more than 500 points to 22,611 during the session. Broader markets saw deeper cuts, with midcap and smallcap indices falling nearly 3 per cent each.
Investor wealth took a hit. BSE market capitalisation dropped to around Rs 418 lakh crore from Rs 429 lakh crore in the previous session, wiping out nearly Rs 11 lakh crore in minutes. By 9:55 am, losses stood at about Rs 9 lakh crore.
Here are five key reasons driving the market fall:
US-Iran tensions escalate, oil route at risk
The biggest trigger is the escalating conflict in West Asia. US President Donald Trump has warned of severe action against Iran’s energy infrastructure if the Strait of Hormuz is not reopened within 48 hours.
Iran has responded by threatening a complete closure of the Strait. This route is critical for global oil supply. Any disruption raises fears of a supply shock.
Markets are pricing in a prolonged conflict. This increases risks of higher inflation and slower global growth.
Global markets crash, sentiment weakens
The selloff is not limited to India. Asian markets saw sharp declines.
Japan’s Nikkei 225 and South Korea’s KOSPI fell up to 6 per cent. This reflects panic across global equities.
Investors are moving to safer assets. Risk appetite has dropped sharply.
FPI selling intensifies
Foreign investors continue to exit Indian markets.
Data from National Securities Depository Limited shows FPIs have sold over Rs 1.03 lakh crore worth of equities in March so far.
Rising crude prices and a weakening rupee are making India less attractive in the short term. This has accelerated outflows.
Rupee hits record low
The Indian currency has come under heavy pressure.
The rupee fell to a record low of 93.84 against the US dollar, weakening nearly 3 per cent since the conflict began. It is among the worst-performing Asian currencies.
A weaker rupee makes imports costlier, especially crude oil. This adds to inflation concerns and hurts market sentiment. (Read full story here)
Crude oil surge and broad-based selling
Oil prices have surged sharply.
Brent crude was hovering near $113 per barrel, while WTI was close to $99. Prices have risen over 50 per cent this month due to supply fears.
Higher oil prices increase input costs for companies and reduce profit margins.
Selling pressure was visible across sectors. Banking heavyweights like HDFC Bank, ICICI Bank and Axis Bank declined. IT stocks such as Infosys and TCS also slipped. Auto, consumption and infrastructure stocks saw similar weakness.
The broad-based nature of the decline signals deep market stress rather than a sector-specific correction.