Market Meltdown: ₹6 Lakh Crore Lost as Sensex and Nifty Plunge Amid Rising Middle East Tensions

Indian stock markets opened sharply lower on Thursday, with the Sensex falling over 1,250 points and the Nifty50 dropping below 25,500. This decline mirrored losses in other Asian markets as investors grew wary due to escalating tensions in the Middle East.

As of around 9:16 am, the BSE Sensex was down 1,264 points (1.5%) at 83,002, while the Nifty50 slipped 344 points (1.33%) to 25,452. The total market capitalization of all companies listed on the BSE fell by ₹5.63 lakh crore to ₹469.23 lakh crore.

Fears of a potential escalation in the Middle East increased after Iran launched ballistic missiles at Israel earlier this week, raising concerns that oil supplies from the region could be disrupted. Consequently, oil prices rose, which is a negative signal for countries like India that rely heavily on oil imports.

From the Sensex, major contributors to the decline included Reliance Industries, HDFC Bank, ICICI Bank, M&M, L&T, and Bharti Airtel. In contrast, JSW Steel and Tata Steel were the only stocks that managed to open higher. The Nifty Oil & Gas index dropped over 1.2%, impacted by the rising tensions, with Hindustan Petroleum, IOC, and GSPL leading the declines. Additionally, the fear gauge, India VIX, jumped 8.9% to 13.06.

Key Factors Behind Today’s Market Crash:

Iran-Israel Conflict:

Concerns rose over the escalating hostilities between Iran and Israel. The Israeli military confirmed the deaths of eight soldiers during ground operations in southern Lebanon, amid reports of Iranian missile attacks targeting Tel Aviv and warnings of imminent responses from Israel.

Surge in Crude Oil Prices:

Oil prices increased as worries about potential disruptions to supply grew. Brent crude briefly crossed $75 per barrel, while West Texas Intermediate reached over $72, both climbing nearly 5% in the last three days. Higher oil prices negatively impact India, which relies significantly on oil imports.Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, warned, “If Israel attacks any oil installations in Iran, it could trigger a massive spike in crude prices, which would be damaging for oil importers like India. Investors should closely monitor the situation.”