Mumbai’s stock market witnessed a dramatic downturn on Wednesday, with the Sensex plummeting nearly 1,500 points in a sharp sell-off that erased over ₹12 lakh crore from investor wealth. By midday, the BSE Sensex had shed 1,451 points or 1.81%, trading at 78,787, while the Nifty50 dropped 476 points or 1.91% to 24,392.
The total market capitalization of companies listed on the Bombay Stock Exchange tumbled to ₹445 lakh crore from ₹456 lakh crore on Monday, marking a staggering loss in a single session. This bloodbath has left investors reeling amid escalating global tensions.
At the heart of the chaos is the intensifying conflict in the Middle East, where Israel and the US have ramped up strikes against Iran, prompting retaliatory attacks on American bases. Fears of a broader war are gripping markets, with analysts warning of severe economic ripple effects including disrupted supply chains and heightened inflation pressures.
Compounding the misery, crude oil prices surged to four-year highs, with WTI crude climbing 2.86% to $76.69 per barrel and Brent crude jumping 3.16% to $83.97. This spike threatens to fuel inflation worldwide, hitting energy-import-dependent India hardest.
The Indian rupee hit an all-time low of 92.41 against the dollar, amplifying losses for foreign investors and adding fuel to the fire. Persistent selling by Foreign Institutional Investors (FIIs), who offloaded ₹3,295.64 crore on Monday, contrasted with buying from Domestic Institutional Investors (DIIs) at ₹8,593.87 crore, but it wasn’t enough to stem the tide.
Volatility indicator India VIX soared 21% to 21, signaling heightened uncertainty and paving the way for further downside risks. As markets digest these shocks, experts urge caution, predicting prolonged volatility until geopolitical tensions ease.