Stock Market Crash: Indian benchmark indices Sensex and Nifty50 tumbled sharply in Wednesday’s trade as rising tensions between the United States and Iran, higher crude oil prices, persistent foreign fund outflows and weakness in the rupee weighed on investor sentiment.
At around 12:30 pm, the BSE Sensex was trading 811 points, or 1.09 per cent, lower at 73,838.61, while the NSE Nifty50 fell 226 points, or 0.96 per cent, to 23,257.15.
The sharp sell-off erased more than Rs 3 lakh crore from the market capitalisation of BSE-listed companies, bringing the total valuation down to nearly Rs 459 lakh crore.
IT stocks lead the market decline
Information technology stocks emerged as the biggest drag on benchmark indices. The Nifty IT index plunged more than 4 per cent, making it one of the worst-performing sectoral gauges during the session.
Heavyweight technology companies witnessed intense selling pressure. Tata Consultancy Services (TCS) and LTIMindtree declined around 7 per cent each. Persistent Systems, Coforge and Tech Mahindra dropped nearly 5 per cent, while Infosys and HCL Technologies lost about 4 per cent each.
US-Iran tensions hurt risk appetite
Investor sentiment remained weak amid fresh geopolitical concerns in the Middle East.
Despite recent comments from US President Donald Trump indicating that Washington and Tehran were moving closer to ending their three-month conflict and restoring normal shipping through the Strait of Hormuz, uncertainty in the region remained elevated.
The US military said on Tuesday that it had intercepted and neutralised several Iranian missile and drone attacks across the Gulf region. The US Central Command (CENTCOM) also reported carrying out defensive strikes on Iran’s Qeshm Island.
The developments pushed crude oil prices higher, raising concerns about inflation and the impact on oil-importing economies such as India.
RBI policy decision in focus
Investors stayed cautious ahead of the Reserve Bank of India’s upcoming monetary policy announcement.
Market participants are watching the central bank’s commentary on inflation, interest rates and economic growth, especially at a time when rising crude oil prices, rupee weakness and global uncertainty are creating additional challenges for the domestic economy.
Rupee weakens further
The Indian rupee remained under pressure and weakened by 14 paise against the US dollar in early trade on Wednesday to 95.50.
A weaker rupee increases import costs and can add to inflationary pressures, particularly when global oil prices are rising.
FII selling continues
Foreign institutional investors continued to pull money out of Indian equities, adding to market pressure.
On Tuesday, foreign investors sold shares worth nearly Rs 8,363 crore, extending the recent trend of sustained outflows from domestic markets.
Analysts believe continued FII selling remains a key concern for near-term market sentiment.
Higher US bond yields add pressure
US Treasury yields moved higher amid renewed geopolitical uncertainty.
The yield on the benchmark 10-year US Treasury note rose to 4.457 per cent, while the 30-year Treasury bond yield climbed to 4.97 per cent.
Higher bond yields typically make fixed-income investments more attractive relative to equities, often prompting investors to reduce exposure to risk assets such as stocks.
The combination of geopolitical tensions, elevated crude oil prices, persistent foreign selling, rupee weakness and caution ahead of the RBI policy decision triggered broad-based selling across Indian equities, pushing benchmark indices sharply lower during Wednesday’s session.
