Indian equities ended the week with steep losses as global tensions, rising crude oil prices and sustained foreign selling triggered a sharp correction in the market. The benchmark indices have now fallen for the third consecutive week, reflecting growing nervousness among investors.
The BSE Sensex dropped 1,471 points, or 1.93 percent, on Friday to close at 74,563.92. The Nifty 50 fell 488 points, or 2.06 percent, to settle at 23,151.10.
Broader markets also remained under heavy pressure. The BSE Midcap Index declined 2.61 percent while the BSE Smallcap Index lost 2.67 percent.
For the week ended March 13, the Sensex plunged 4,355 points, or about 5.5 percent, while the Nifty 50 fell nearly 1,300 points, or 5.3 percent.
The sell-off wiped out nearly ₹20 lakh crore in investor wealth as the total market capitalisation of companies listed on the Bombay Stock Exchange fell to around ₹430 lakh crore from about ₹450 lakh crore a week earlier.
Market analysts attribute the sharp fall to a combination of global geopolitical tensions, rising oil prices, currency weakness and sustained foreign investor selling.
The escalating conflict involving the United States, Iran and Israel has significantly heightened global market volatility.
Reports indicate that Iran has stepped up attacks on ships moving through the Strait of Hormuz, a crucial shipping route through which nearly 20 percent of global oil supplies usually pass. Any prolonged disruption in this corridor could tighten global energy supply and trigger further price spikes.
Brent crude has climbed above $100 per barrel amid fears of supply disruptions.
Higher crude prices are a major concern for India, which imports more than 80 percent of its oil requirements. Elevated energy costs could:
push up inflation
widen the current account deficit
weaken the rupee further
reduce the scope for interest rate cuts
These risks are weighing heavily on investor sentiment.
Currency weakness has added to market worries. The Indian rupee fell to a record low of about 92.45 against the dollar on Friday as rising oil prices and capital outflows pressured the currency.
A weaker rupee reduces returns for overseas investors and often accelerates foreign capital outflows. It also raises imported inflation, particularly when global oil prices remain elevated.
Foreign institutional investors have been aggressively selling Indian equities in recent sessions.
FIIs have sold shares worth over ₹46,000 crore in the cash market so far in March
the pace of selling this month is among the highest in recent months
persistent outflows have intensified pressure on benchmark indices
Market participants are also worried that prolonged geopolitical tensions could trigger a fresh bout of global inflation.
Higher energy prices could force major central banks, including the Federal Reserve, to maintain tighter monetary policies for longer. That scenario could strengthen the dollar and lead to further capital outflows from emerging markets such as India.
If crude prices remain elevated and geopolitical tensions persist, analysts expect market volatility to remain high in the near term.
