Indian equities extended their sharp decline on Thursday, with benchmark indices slipping further amid global uncertainty, rising oil prices and persistent foreign investor selling. The four-day sell-off has erased nearly ₹10 lakh-crore of investor wealth and pushed market sentiment firmly into risk-off territory.
The BSE Sensex has plunged 2,884 points, or 3.65 percent, in just four sessions this week. The Nifty 50 has dropped 811 points, or 3.3 percent during the same period, despite a brief rebound earlier in the week.
On Thursday alone, the Sensex ended 829 points lower at 76,034.42, while the Nifty 50 fell 228 points to close at 23,639. Midcap and smallcap stocks also weakened, reflecting broader risk aversion in the market.
The overall market capitalisation of BSE-listed companies fell to around ₹440 lakh-crore from nearly ₹450 lakh-crore last week. Thursday’s decline alone wiped out about ₹2 lakh-crore in investor wealth.
• Sensex down 2,884 points (3.65 percent) this week
• Nifty 50 down 811 points (3.3 percent)
• Investors’ wealth eroded by nearly ₹10 lakh-crore
• Thursday’s loss alone: about ₹2 lakh-crore
Several global and domestic factors are weighing on investor sentiment.
Oil prices surge again
Rising crude oil prices are the biggest trigger behind the recent market weakness.
The global benchmark Brent crude climbed back above $100 per barrel after attacks on oil tankers in Iraqi waters disrupted supply and heightened fears of further escalation in the Middle East conflict.
India imports nearly 90 percent of its crude oil requirements, making the economy highly sensitive to oil price spikes. Economists estimate that every $1 increase in crude prices raises India’s annual import bill by about ₹16,000 crore.
Rupee weakens to record lows
The Indian rupee has also come under pressure, adding to negative market sentiment.
The rupee fell to a record low of 92.365 per dollar during Thursday’s session before closing near 92.20. A weaker currency reduces returns for foreign investors and raises inflation risks by making imports costlier.
Higher inflation could eventually force the Reserve Bank of India to maintain tighter monetary policy, which is generally negative for equities.
Relentless foreign investor selling
Foreign institutional investors (FIIs) continue to exit Indian equities amid global uncertainty.
• FIIs have sold over ₹39,100 crore worth of shares in March so far
• Selling has continued for nine straight months
• Domestic institutional investors (DIIs) are buying, but not enough to offset FII outflows
Sustained foreign selling is one of the biggest drags on market momentum.
Middle East conflict intensifies
The ongoing conflict involving the US, Israel and Iran has further unsettled global markets.
Iran has reportedly targeted shipping in the Strait of Hormuz, raising fears of disruptions to global energy supplies. Several oil terminals in Iraq have also suspended operations after tanker attacks.
The conflict, which began on February 28, has shown no signs of easing, keeping energy markets volatile and investors cautious.
Rising macroeconomic risks
Analysts warn that a prolonged surge in oil prices could have broader economic consequences for India.
Higher crude prices could:
• Push up inflation
• Widen the current account deficit
• Slow economic growth
• Increase pressure for higher interest rates
According to estimates cited by analysts, a $10 increase in oil prices could widen India’s current account deficit by about 0.35–0.5 percent of GDP and raise inflation by roughly 20 basis points.
With geopolitical tensions persisting and foreign investors remaining cautious, analysts say market volatility may continue in the near term.