Mumbai: The ongoing conflict in West Asia has created major uncertainty in global financial markets, leading to a sharp fall in Indian equities. Since the beginning of the conflict, investors in India have lost around Rs 23.44 lakh crore in market wealth.
The fall came as the BSE Sensex dropped more than 6 percent during this period. Rising geopolitical tensions and higher crude oil prices have made investors cautious, leading to heavy selling in several sectors.
Conflict Triggers Global Market Shock
The conflict began after the United States and Israel launched military strikes on Iran on February 28. The attacks reportedly resulted in the death of Iran’s Supreme Leader Ayatollah Ali Khamenei.
Following the strikes, Iran carried out a series of retaliatory attacks targeting Israeli and American military bases located in several Gulf countries. These included bases in the UAE, Bahrain, Kuwait, Jordan and Saudi Arabia.
The escalating tensions quickly spread uncertainty across global markets.
Oil Prices Surge After Strait of Hormuz Disruption
The conflict has also affected global energy markets. Oil and gas prices surged after Iran effectively blocked the Strait of Hormuz.
This narrow shipping route connects the Persian Gulf to the Gulf of Oman and handles nearly 20 percent of the world’s oil and liquefied natural gas (LNG) shipments.
Due to the disruption, Brent crude oil prices jumped 6.66 percent to reach about USD 98.11 per barrel.
Higher crude prices have raised concerns about inflation, currency pressure and India’s trade balance.
Sensex Drops Sharply
Since February 27, the 30-share BSE Sensex has fallen by 5,252.77 points, or about 6.46 percent.
During this period, the total market capitalisation of companies listed on the BSE dropped by Rs 23,44,237.26 crore to Rs 4,40,06,434.01 crore, which is around USD 4.77 trillion.
On Thursday alone, the Sensex declined by 829.29 points, or 1.08 percent, closing at 76,034.42. During the day, it had fallen as much as 992.53 points.
Top Losers and Gainers
Among Sensex companies, Mahindra & Mahindra recorded the biggest fall with a decline of 4.23 percent. Other major losers included Maruti, Bajaj Finance, Larsen & Toubro, UltraTech Cement and Trent.
However, some companies managed to gain despite the weak market. These included NTPC, Power Grid, Tech Mahindra, HCL Tech and Reliance Industries.
Sector-Wise Market Performance
Several sectors witnessed significant declines. The auto sector dropped 2.92 percent, while FMCG fell 1.62 percent. Consumer discretionary stocks declined 1.59 percent and realty stocks dropped 1.53 percent.
Private bank stocks fell 1.45 percent, and the top 10 banks index declined 1.29 percent.
On the positive side, utilities rose 3.31 percent. Power stocks gained 2.51 percent, while energy, capital goods, oil and gas, and metal sectors also registered modest gains.
The BSE smallcap select index fell 0.65 percent, and the midcap select index slipped 0.55 percent.
Market breadth also remained weak, with 2,516 stocks declining, 1,713 advancing and 175 remaining unchanged on the BSE.
