Stock market today: Benchmark equity indices ended sharply lower on Monday, with the Nifty 50 settling at 24,028.05, declining 422.40 points (1.73%), while the Sensex closed at 77,566.16, down 1,352.74 points (1.71%) amid Middle East conflict. The sharp selloff wiped off more than Rs 8.5 lakh crore from the total market capitalisation of all companies listed on the BSE, dragging it down to Rs 441 lakh crore.This follows a weak close on Dalal Street last week, when eight of the ten most valued companies together saw their market capitalisation shrink by Rs 2,81,581.53 crore.
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Analysts expect geopolitical developments to remain the key factor guiding market direction for this week as investors will be closely watching how the ongoing crisis in the Middle East could influence global crude oil prices. Market participants will also track global cues and the trading behaviour of foreign investors, which are likely to play a crucial role in shaping sentiment on Dalal Street.According to Ajit Mishra, SVP, Research at Religare Broking Ltd, external factors will remain critical for market movement in the near term. “This week, movements in global crude oil prices and further geopolitical developments in West Asia will remain critical external variables influencing market direction. The week will also feature key macroeconomic releases that could shape near-term sentiment,” Mishra told PTI.Ponmudi R, CEO of Enrich Money, said that investors should prepare for continued volatility as geopolitical tensions continue to dominate market thinking. He further added that trends in foreign institutional investor (FII) flows and currency movements will also be closely watched, as they often reflect broader shifts in global capital allocation and confidence in emerging markets like India.Here’s why Dalal Street crashed today:
1) Oil price soars above $100-mark
Crude oil surged beyond $100 as tensions intentify in Middle East, raising fears of extended disruptions in the Strait of Hormuz. West Texas Intermediate (WTI) jumped 30% to $118.21 per barrel on Monday morning, while Brent Crude rose 27% to $118.22 per barrel. This is the first time prices have crossed $100 per barrel since Russia’s invasion of Ukraine in 2022. The Strait of Hormuz remains effectively closed to normal traffic following attacks on several tankers. Over 20% of the world’s oil supply passes through this narrow waterway linking the Persian Gulf with the Gulf of Oman and the Arabian Sea.
2) The Middle East war worsens
The conflict between Iran and the US-Israel alliance entered its tenth day, worsening over the weekend. Iran appointed Mojtaba Khamenei as his father Ali Khamenei’s successor, signalling that Tehran remains firmly in control despite the conflict. Israel has threatened to eliminate Khamenei’s successor, while US President Donald Trump warned that the war may only end once Iran’s military and leaders are “wiped out.” US and Israeli forces attacked several Iranian oil depots, with footage showing smoke and fire lighting up Tehran at night. In retaliation, Iran launched drone strikes on other Gulf nations, causing multiple civilian injuries. The conflict began after US and Israeli strikes reportedly killed Iran’s Supreme Leader, prompting Iranian retaliatory attacks across the region. The lack of any diplomatic resolution has unsettled global investors.
3) Rupee tumbles
Rupee hit its all time low on Monday, falling to 92.52 against US dollar. The currency opened at $92.1975 per dollar, down 0.5% from Friday’s close of $91.74, as soaring oil prices continue to weigh on the currency. “Going ahead, dollar index movement and developments in the West Asia conflict will remain key drivers for the rupee as FII’s position gets influenced by crude rates. Technically, support is placed near 91.10, while resistance is seen around 92.00, with the currency likely to remain sensitive to global risk sentiment and capital flows,” Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities told ET.
4) Persistent FII selling weakens sentiment
Foreign investors continued net selling of Indian equities last week, with net sales exceeding Rs 21,800 crore in the first week of March. This persistent selling has dampened overall market sentiment. “Uncertainty surrounding the Middle East conflict, steady decline in the market, the vulnerability of the Indian economy to sharp crude spike and the sharp depreciation of the rupee contributed to the sustained FII selling in the cash market,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments, as cited by ET.
5) Investor sentiments mirror global market
Asian markets tumbled following the sharp rise in global crude prices. Japan’s Nikkei 225 dropped over 6%, South Korea’s Kospi fell nearly 8%, Hong Kong’s Hang Seng slid nearly 3%, and China’s Shanghai Composite was down more than 1% by 9.02 am IST. Wall Street and European markets had already closed deep in the red on Friday, with the Nasdaq falling over 1.5%, the UK’s FTSE down more than 1%, and France’s CAC and Germany’s DAX each down nearly 1%. Futures suggest Wall Street will open lower, with S&P 500 contracts down 1.6% and Nasdaq futures sliding 1.7%.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
