The Indian domestic ended the day on a weak note. The selling pressure was visible across the board.
In today’s trade, the Sensex slipped sharply by over 1,800 points or 2.45% to close near 72,696.39, while the Nifty fell around 600 points or 2,6% to settle at 22,512.65.
The decline was not limited to large-cap stocks. Nifty Midcap and smallcap indices also saw deeper cuts, ending down nearly 4%.
“Domestic markets witnessed a sharp decline, mirroring weakness across Asian markets amid escalating tensions in the Middle East and concerns over potential disruptions to global energy supplies. Investor sentiment turned cautious following Trump’s 48-hour ultimatum to Iran on the Strait of Hormuz,” said Vinod Nair, Head of Research, Geojit Investments.
“Rising global bond yields signalled heightened inflation and fiscal concerns, while the rupee falling to a record low further pressured markets and triggered FII outflows. In the near term, markets are likely to remain risk-averse until there is greater clarity on de-escalation, though the correction is offering selective long-term opportunities for investors,” he added.
The mood remained cautious throughout the session, with multiple global and domestic factors weighing on investor sentiment. From rising geopolitical tension to foreign investor selling, several triggers came together to drag the market lower.
Let’s take a look at the key reasons behind today’s market fall –
Rising geopolitical tension unsettle markets
One of the biggest factors behind today’s fall was the escalating tension in the Middle East.
Hopes of stability have faded as the situation between the United States and Iran continues to worsen. Fresh warnings from both sides have raised fears of further disruption, especially around key global trade routes like the Strait of Hormuz.
This uncertainty led to risk-off sentiment across global markets, including India.
Crude oil spike raises macro concerns
Another major concern has been the sharp rise in crude oil prices. With tension in the Middle East intensifying, oil prices have surged, which is not a positive sign for an oil-importing country like India.
“Geo-political tension has pushed Brent crude oil prices sharply higher, with prices currently hovering around $112 per barrel, raising concerns for oil-importing economies like India,” said Bajaj Broking Research.
The broking further added, “Elevated crude oil prices pose a major macroeconomic challenge for India due to its strong reliance on energy imports. A prolonged rise in oil prices can increase inflationary pressures, expand the current account deficit, and put further pressure on the domestic currency.”
Foreign investors continue to sell
Foreign Portfolio Investors (FPIs) have remained aggressive sellers in the market. Since the conflict in West Asia intensified, they have pulled out over Rs 1 lakh crore from Indian equities, adding to the downward pressure.
“The war in West Asia has aggravated the selling by FPIs. The volume and intensity of FPI selling increased in recent days when the conflict escalated. FPIs were net sellers on all trading days in March,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
He further noted, “The complete negative stance of the FPIs towards India is evident from the fact that they are selling recklessly without regard for valuations.”
Rupee weakness adds to the pressure
The Indian rupee also weakened sharply, which further impacted market sentiment.
The currency slipped to a record low of 93.89 against the US dollar, crossing its previous low.
Broad-based selling across sectors
The sell-off was widespread, with most sectors ending in the red. Metal, consumer durable, and realty stocks saw the sharpest cuts, falling around 5% during the session. Financials and media stocks also declined between 3-4%, while sectors like FMCG and pharma were down over 2%.
The IT index saw only a marginal decline compared to others, but it still ended in the red.