Mumbai, March 23: The Indian stock market experienced a significant downturn on the first trading day of the week, driven by escalating conflicts in West Asia. The intensifying U.S.-Iran tensions led to a decline of over 2% in major domestic benchmarks, Nifty 50 and Sensex. This follows a notable drop on March 19.
At market close, the BSE Sensex, comprising 30 stocks, fell by 2.46%, or 1,836.57 points, settling at 72,696.39. Meanwhile, the NSE Nifty dropped 2.60%, or 601.85 points, to close at 22,512.65.
Entering the fourth week of the U.S.-Iran conflict, inflation fears rattled global markets, resulting in heavy selling in the Indian stock market, which saw a nearly 2.5% decline.
During intra-day trading, the Sensex opened at 73,732.58 but plummeted to a low of 72,558.44, a drop of 1,974.5 points or 2.64%. The Nifty 50 opened at 22,824.35 and fell to a low of 22,471.25, a decrease of 643 points or 2.75%.
The Nifty India Volatility Index (India VIX) surged by 19.11% during Monday’s session, reaching 27.17, before closing with a 17.17% gain at 26.73.
Broader markets saw even steeper declines. The Nifty Midcap index fell by 3.90%, while the Nifty Smallcap index dropped by 3.94%.
Sector-wise, the Nifty Construction Durable sector suffered the most, with a decline of over 5%. The Nifty Realty and Nifty Metal sectors also performed poorly, with drops of 4.74% and 4.97%, respectively.
Additionally, the Nifty Bank index fell by 3.72%, the Nifty Auto index by 3.16%, and the Nifty FMCG index by 2.49%. The Nifty IT sector saw the smallest decline at 0.18%.
This drop in the Sensex resulted in a loss of approximately ₹14 lakh crore in the total market capitalization of BSE-listed companies, decreasing from ₹428.76 lakh crore on Friday to ₹415.11 lakh crore.
Market expert Sunil Shah commented that the first day of the new week was particularly grim for investors, with the Sensex dropping over 1,800 points.
He attributed this decline to recent developments over the weekend and a statement from the U.S. President warning of serious consequences for Iran if the Strait of Hormuz is not reopened within 48 hours. This created a negative sentiment in the market.
In response, Iran adopted a tough stance, indicating it would target Gulf countries’ infrastructure if such actions occurred. Shah noted that such statements and heightened tensions are detrimental to the market and could worsen if the situation escalates.
He emphasized that India mirrors global market trends, leading to declines across major markets. Rising crude oil prices could negatively impact India’s economy and corporate earnings.
Shah further stated that ongoing geopolitical tensions in West Asia are keeping the market outlook bearish. With India importing about 80% of its energy needs, not only are high oil prices a concern, but disruptions in supply due to issues in the Strait of Hormuz also pose a risk.
He concluded that until a resolution to this tense situation is found and conditions normalize, a positive market environment will be challenging. Currently, the outlook remains negative and concerning for investors.
My name is Ganpat Singh Choughan. I am an experienced content writer with 7 years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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