Breaking News:Rs 5 lakh cr wiped off! Sensex slumps over 1,000 points, Nifty near 23K: Rupee at historic low among 6 key factors– What Just Happened

Stock markets fell sharply on Friday, with the Sensex plunging over 1,000 points and the Nifty testing the 23,000 mark. The decline followed a strong two-day rally of over 3.5% in the benchmarks. A record-low rupee, along with fading hopes of a de-escalation in the Iran–US conflict, weighed on sentiment and brought bears back to Dalal Street.

Sensex declined around 1,000 points to 74,272, while Nifty 50 fell more than 291 points to 23,050 at 9.40 am. The sharp decline wiped off nearly Rs 5 lakh crore from the total market capitalisation of all companies listed on BSE within minutes of opening, dragging it down to Rs 426 lakh crore.

Zomato-parent Eternal, Bajaj Finserv, Bajaj Finance, IndiGo, L&T, HDFC Bank and State Bank of India (SBI) were among the top losers on Sensex, falling 2-3%. IT stocks like TCS, HCLTech, Infosys and Tech Mahindra were among the only gainers on the benchmark index, rising up to 1%.

All sectoral indices on NSE hovered in the red, except for Nifty IT, which was up around 1%. Nifty PSU Bank index fell more than 2% to lead losses, as India Vix spiked around 4%. 1,972 stocks declined on NSE, while 660 advanced and 96 remained unchanged.

Here are the key factors impacting markets today:

1) Rupee breaches 94-mark, hits fresh record low

Indian rupee hit a fresh record low on Friday, falling past the 94-mark against the US dollar. The Indian currency fell to 94.1575 per dollar, breaching its previous all-time low of 93.98 hit earlier this week. It has ⁠declined about ‌3.5% since the war began late last month.
The continuation of the conflict in Iran and sustained selling by the FPIs contributed to the weakness in the rupee, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “Despite the decline in Brent crude and intervention by the RBI the rupee continues to decline mainly on concerns of more capital flight from India stemming from FPI outflows,” he added.
“Despite initial signs of US–Iran talks, the Strait of Hormuz continues to face disruptions, keeping supply risks intact and supporting higher crude prices. This sustained crude risk is directly impacting India’s import bill expectations, keeping the rupee under pressure. The broader bias remains weak unless energy supply normalises meaningfully. Near-term range for rupee is seen between 93.70–94.50,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.

2) Iran-US war drags on

Despite bleak assurances from US President Donald Trump, the war between Iran and US-Israel continues to rattle global markets. Trump reiterated that talks with Iran were going “very well”. However, an Iranian official quoted by Reuters said that US’ proposal for ending the war was “one-sided and unfair”.

Trump announced late on Thursday that he is postponing an attack on Iran’s energy facilities as he delayed the deadline for Tehran to open the Strait of Hormuz to April 6. However, markets now seem to doubt the de-escalation expectations which had earlier triggered a two-day rebound on Dalal Street.

3) Oil prices remain elevated

Despite the rally cooling off slightly in the morning, oil prices still remain elevated. Oil futures declined around 1% in the morning. Brent Crude futures are still at $107 per barrel as the hopes for de-escalations fade away.

4) Weakness in global markets

Wall Street on Thursday recorded its worst day since the beginning of the war in the Middle East, amid growing doubts over possible de-escalation. S&P 500 sank 1.7%, while the tech-heavy Nasdaq declined more than 2%. The Dow Jones, meanwhile, fell more than 1%.

Asian markets were mostly in the red on Friday. South Korea’s Kospi declined nearly 3% while Japan’s Nikkei was down over 0.6%. China’s Shanghai Composite and Hong Kong’s Hang Seng, meanwhile, were up marginally.

European stock markets also closed in the deep red yesterday, with France’s CAC, Germany’s DAX and UK’s FTSE falling more than 1% each.

5) FII selling continues

Persistent selling by foreign investors remains a key concern. FIIs remained net sellers on Indian equities for the 19th consecutive session, net selling shares worth nearly Rs 1,805 crore on Wednesday, according to data on NSE. While this does not reflect today’s activity, sustained outflows in recent sessions have weighed on investor sentiment.

6) US bond yield rises

US bond yields rose amid fading hopes for de-escalations in the raging war between Iran and US-Israel. The 10-year US Treasury yield climbed 4 basis points to cross 4.42% on Friday. The two-year US treasury yield, which is highly sensitive to expectations around rate cuts by the Federal Reserve, meanwhile remained elevated at 3.98%. Rising bond yields tend to make government securities more attractive relative to equities, potentially putting pressure on stock markets.

A silver lining to the cloud?

The on and off reaction of the market to news and events regarding the war is likely to continue in the near-term, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments, who added the elevated crude prices have triggered another round of risk-ff sentiment in the Indian stock markets.

However, the analyst said that the market correction since the beginning of the war has brought Nifty valuations to fair levels. Nifty is now trading at about 19 times, which is lower than the last 10-year average of 22.4 times, he said, adding, “But if India’s macros take a hit due to this energy crisis, valuations may again decline, factoring in the feared hit to earnings growth in FY27.”

“The Indian economy is strong enough to absorb the shock if the war ends, crude cools down and gas availability becomes normal. But if the war prolongs, crude remains elevated for months together, and gas availability constraints continue, the stress on India’s macros will be significant and the market will discount that. In brief, everything boils down to how long the war will last. The market hope is that since a prolonged war is in nobody’s interests, it may end soon. The US itself is now looking for an exit strategy. Market corrections and rising retail price of petroleum products may exert pressure on the US regime to cool down the conflict,” he added.

Technical view

If Nifty directly falls below 22,950, then it can bring the 22,500-21,900 range back into focus, said Anand James, Chief Market Strategist at Geojit Investments. Meanwhile, if Nifty can float above 22,950, the analyst expects intermittent upswings, adding that such attempts are likely to be capped at 23,220 or 23,300.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)