Stock Market Plunges 1,200 Points at Open; Investors Lose ₹7 Lakh Crore

The Indian stock market witnessed another decline today. On Monday—the first trading day of the week—the market's benchmark index, the Sensex, plummeted by nearly 1,200 points immediately after opening. Meanwhile, the Nifty 50 also experienced intense selling pressure. In a matter of mere minutes, investors saw over ₹7 lakh crore of their wealth wiped out. However, the market staged a partial comeback shortly thereafter. At 9:37 AM—at the time of writing this report—the benchmark Sensex was trading at 73,127.69, reflecting a decline of approximately 500 points.

Investors suffered losses of nearly ₹5 lakh crore within just a few minutes, as the total market capitalization of companies listed on the BSE shrank from ₹422 lakh crore in the previous session to ₹415 lakh crore.

Why is the Indian Stock Market Falling?

US-Iran Conflict: The conflict between the US and Iran, which began on February 28, has now been ongoing for over a month. Mixed signals are emerging regarding whether it will come to an end anytime soon. Last week, US President Donald Trump extended the restrictions imposed on attacks targeting Iran's energy infrastructure. However, very little progress has been made toward a complete resolution of this dispute.

Continuous Selling by FPIs: Amidst the fierce conflict currently unfolding in the Middle East, Foreign Portfolio Investors (FPIs) have been consistently selling off their holdings in Indian equities. According to NSDL data, Foreign Portfolio Investors (FPIs) have withdrawn ₹1,23,025 crore from Indian financial markets up to March 27. In the fortnight ending March 15, FPI equity assets declined by $79 billion, falling to $710 billion. This marks the largest fortnightly decline in at least six years—a drop even more substantial than the sell-off triggered by the COVID-19 pandemic.

Global Markets in the Red: Global markets witnessed a sharp downturn, and Dalal Street was not immune to the impact. Japan's Nikkei tumbled by over 3%, while South Korea's KOSPI fell by nearly 3%. The Taiwan Weighted Index declined by 1.5%, while the Hang Seng dropped by approximately 1%. Wall Street closed sharply lower in the previous session; the S&P 500 fell by about 1.7%, and the tech-heavy Nasdaq recorded a decline of over 2%. European markets also closed in the red.

Surge in Crude Oil Prices: Brent crude prices continued their upward trajectory and are currently trading above the $115 per barrel mark, as uncertainties surrounding the US-Iran conflict persist. The Strait of Hormuz—through which approximately 20% of the world's crude oil and LNG passes—remains effectively closed to most shipping traffic. Concerns are mounting that elevated crude oil prices will adversely impact India's macroeconomic sentiment, given that the country is the world's third-largest importer of crude oil. India meets approximately 85–90% of its oil requirements through imports.