Sensex And Nifty Slide Sharply As Crude Oil Surge And Iran War Rattle Global Markets

Mumbai, March 9: Indian stock markets witnessed a sharp sell-off on Monday as rising crude oil prices and escalating tensions in West Asia triggered widespread risk aversion among investors.

During intraday trading, the BSE Sensex plunged 2,345.89 points to touch a low of 76,573.01. The Nifty 50 also dropped sharply, falling 711 points to 23,739.20.

The steep decline wiped out nearly ₹12 lakh crore from investor wealth, with the overall market capitalisation of companies listed on the Bombay Stock Exchange shrinking to about ₹438 lakh crore from ₹450 lakh crore in the previous session.

Market experts attributed the fall primarily to rising geopolitical tensions involving Iran, United States and Israel, which pushed global crude prices sharply higher.

The benchmark Brent Crude surged more than 25 percent to trade above 116 dollars per barrel, extending last week’s strong rally. Investors fear that disruptions to shipping through the Strait of Hormuz could significantly impact global oil supply.

Higher crude prices also weighed heavily on India’s currency. The Indian Rupee weakened to a record low of around 92.3 against the U.S. dollar, increasing concerns about inflation and the country’s current account deficit.

According to Vinod Nair, the escalation of geopolitical tensions has pushed investors toward safer assets while increasing caution across financial markets.

Analysts noted that uncertainty surrounding the conflict has led to heavy foreign investor outflows. Foreign institutional investors sold equities worth nearly ₹21,831 crore last week, adding pressure on benchmark indices. However, domestic institutional investors partially cushioned the decline with inflows of about ₹32,786 crore, supported largely by steady systematic investment plan contributions.

Market strategists believe volatility may continue in the near term and are advising investors to adopt a defensive approach rather than panic selling.

Ajit Mishra said traders should prioritise capital preservation and maintain strict stop-loss levels due to the current uncertain environment marked by geopolitical risks, elevated crude prices and persistent foreign investor selling.

Experts suggest that sectors linked to domestic demand could remain relatively resilient, while areas sensitive to inflation and fuel costs may face pressure if oil prices stay elevated.

Brokerage firms have recommended focusing on sectors driven largely by the domestic economy, including banking, infrastructure, automobiles, real estate and consumption, while selectively considering opportunities in pharmaceuticals, defence and public sector enterprises.

Analysts added that while the ongoing correction has created short-term uncertainty, it could also present selective buying opportunities for long-term investors once global conditions stabilise.