Breaking Update: Here’s a clear explanation of the latest developments related to Breaking News:Rs 9 lakh cr wiped out! Sensex crashes 1,600 points, Nifty below 22,350: 7 factors behind today’s D-St bloodbath– What Just Happened and why it matters right now.
Sensex crashed around 1,636 points to end the session at 71,948, while the Nifty 50 sank 488 points to close at 22,331. The sharp selloff wiped off more than Rs 9 lakh crore from the total market capitalisation of all companies listed on BSE, dragging it down to Rs 413 lakh crore.
Bajaj Finance, UltraTech Cement, State Bank of India (SBI), IndiGo, Kotak Mahindra Bank, Bajaj Finserv and Axis Bank shares were the top losers on Sensex, falling 3-5%.Tech Mahindra, Power Grid and Reliance Industries were the only gainers on the index, rising up to 2%.
As India Vix, which measures volatility in the markets, surged more than 4%, most of the sectors fell prey to the risk-off sentiment. Nifty PSU Bank and Nifty Private Bank dropped around 5% and 3.4% respectively. Around 2,764 stocks declined on the stock exchange, while 570 advanced and 77 remained unchanged.
Here are the key factors pushing markets down today:
1) US-Iran war jitters
President Donald Trump-led US administration is preparing for weeks of ground operations in Iran, the Washington Post reported yesterday. US Central Command said on X that it has deployed 3,500 Marines and sailors to the Middle East aboard the USS Tripoli, marking the largest American military buildup in the region in two decades.
Iran’s parliament speaker, meanwhile, warned that the country’s forces were “waiting for American soldiers” and would “rain fire” on any US troops attempting to enter Iranian territory. In his message, reported by Iranian state media, Ghalibaf also said “the enemy signals negotiation in public, while in secret it plots a ground attack”. Additionally, Yemeni Houthis launched their first attacks on Israel over the weekend, widening the ongoing war and adding to inflation woes.
The war, which began earlier this month with US-Israeli strikes killing Iran’s former supreme leader Ayatollah Ali Khammenei and resulting in massive retaliation from Tehran, has spread across the Middle East. Fear now rises for a ground offensive and the entry of Yemen’s Iran-aligned Houthis.
2) Oil prices surge
As a result of the rising hostilities in the Middle East, the ongoing rally in oil prices regained strength. Brent crude futures jumped around 3% to trade at $115 per barrel, while West Texas Intermediate (WTI) futures gained nearly 2% to trade at $101 per barrel in the afternoon.
Macquarie has warned that crude prices could surge to an unprecedented $200 a barrel if the Iran conflict drags into mid-year and keeps the vital Strait of Hormuz shut. “If the strait were to stay closed for an extended period, prices would need to move high enough to destroy an historically large amount of global oil demand,” the Macquarie analysts said in the March 27 report, as reported by Bloomberg. “The timing of the re-opening of the straits, and physical damage to energy infrastructure, is the main determinant of the longer-term impact on commodities,” it added.
3) Bank stocks tumble after RBI caps FX positions
Bank stocks sharply tumbled after the Reserve Bank of India (RBI) on Friday directed banks to cap their net open rupee positions in the foreign exchange market at $100 million by the end of each business day, with compliance required latest by April 10. The RBI’s curbs on onshore position limits are expected to lead to dollar selling by banks in the domestic foreign exchange market amid unwinding of existing arbitrage positions.
These arbitrage trades were built by buying dollars onshore and selling them in the NDF market to exploit the spread between the two segments. This spread had widened significantly amid sharp rise in volatility and fall in rupee on heightened risk aversion and oil-driven pressures amid the US-Iran war.
While this led to a much-needed relief in rupee, bank stocks significantly declined, which in turn pulled down benchmark indices.
4) Global markets in red
Global markets tumbled, with Dalal Street being no exception. Japan’s Nikkei plunged more than 3%, while South Korea’s Kospi sank around 3%. Taiwan Weighted dropped 2%, while Hang Seng declined nearly 1%. In Europe, Germany’s DAX and France’s CAC declined marginally while UK’s FTSE bucked the trend to rise 0.5%.
Wall Street closed the previous session in the deep red, with S&P 500 falling around 1.7% and tech-heavy Nasdaq declining over 2%.
5) FII selling continues
Indian stock markets have seen relentless selling by foreign investors, which has weighed down on rupee and sentiment. FIIs remained net sellers of Indian equities for the 20th consecutive session, selling shares worth nearly Rs 4,367 crore on Friday, according to data on NSE. While this does not reflect today’s activity, sustained outflows in recent sessions have weighed on investor sentiment.
6) Rupee breaches 95-mark for first time
Rupee extended its free fall, after recording sharply during the morning trading hours. Rupee breached the historic $95 mark against the US dollar for the first time ever today. “Even though the RBI directive will curb excessive speculation in the futures market, this is not sufficient to prevent the weakness in the currency which stems from the rising trade and CAD triggered by the spike in crude and sustained FPI selling in the market,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
Meanwhile, Finance Minister Nirmala Sitharaman said that the Indian currency is “doing fine”. Speaking at the Lok Sabha, she said, “Compared to other emerging economies, the rupee is doing fine (theek chal raha hai)…Absolutely going fine.”
7) Nifty monthly F&O expiry
The sharp decline in stock markets also comes as today marks the monthly expiry of Nifty’s options and futures contracts. Usually, the monthly expiry falls on the last Tuesday of the month. However, markets will remain closed tomorrow on account of Shri Mahavir Jayanti.
Markets usually see heightened volatility on expiry days as traders adjust their positions.
What lies ahead?
Amid unresolved global tensions, rising oil prices, and continued FII outflows, the market ended the final trading session of the current financial year on a cautious note, explained Vinod Nair, Head of Research at Geojit Investments. “Banking stocks were among the key laggards following the RBI’s new restrictions on banks’ foreign exchange positions aimed at stabilizing the rupee, which led to sharp declines across major private and public sector lenders,” he added.
“While valuations now appear more favourable after the recent correction, the trajectory of earnings revisions remains the key determinant of market direction. Continued volatility in oil prices and rupee weakness may exert pressure on input costs, increasing the risk of near-term earnings downgrades,” the analyst further said.
Technical view
Nifty opened with a gap down on the final trading day of FY26 and attempted an early recovery, but the bounce lacked follow-through, said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities. “The index faced selling pressure at higher levels and eventually broke its key intraday support of 22,470–22,450, slipping further to close at 22,331, down 2.14%. Notably, this marks the 8th session in the March expiry series where Nifty has closed with losses of 1% or more, indicating sustained weakness,” the analyst noted.
“Going ahead, the immediate support for Nifty is placed in the 22,200-22,150 zone. Any sustainable move below this zone could result in Nifty extending its weakness towards 22,000, followed by 21,800 in the short term. On the upside, the zone of 22,450–22,500 zone is likely to act as an immediate resistance,” he added.
(With inputs from Reuters)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)