₹12 lakh crore wiped out as Sensex crashes 2,400 points
What's the story
India's benchmark stock indices, the Sensex and Nifty, witnessed a massive crash on Monday. The Sensex plummeted by nearly 2,400 points to 76,424 while the Nifty50 fell by over 700 points to 23,750. The sharp fall erased more than ₹12.39 lakh crore from the total market capitalization of all BSE-listed companies in less than 10 minutes after opening trade.
Market downturn
All Sensex stocks turn red
The market crash saw all Sensex constituents turn red with IndiGo shares taking the biggest hit, falling nearly 8%. Other major losers included Tata Steel, L&T, SBI, Maruti Suzuki and Eternal shares which fell around 5% each. Among sectoral indices on NSE, the Nifty PSU Bank index was the top loser crashing over 5%. Nifty Auto plunged around 4% while Nifty Realty and Nifty Private Bank indices were down over 3% each.
Oil impact
Iran-Israel conflict pushes crude oil prices sharply higher
The ongoing Iran-Israel-US conflict has led to a spike in crude oil prices, further fueling inflation concerns. West Texas Intermediate (WTI) jumped 30% to $118.21 per barrel on Monday morning while Brent Crude rose 27% to $118.22 per barrel. This is the first time since Russia invaded Ukraine in 2022 that oil prices have crossed the key $100 per barrel mark.
Supply disruption
Strait of Hormuz remains closed amid ongoing conflict
The Strait of Hormuz, a key chokepoint for global oil supply, remains closed for regular traffic after several tankers were bombed in the area. The waterway connects the Persian Gulf with the Gulf of Oman and Arabian Sea and more than 20% of global oil supply passes through it. Despite US President Donald Trump's administration claiming that the strait is open and offering to insure vessels transiting through it, market fears persist over potential Iranian attacks on ships attempting passage.
Currency fluctuation
Indian rupee falls to record low against US dollar
The Indian rupee opened at $92.1975 against the US dollar, a 0.5% fall from the previous close of $91.74. US Treasury yields rose for the fourth consecutive day yesterday amid rising worries that higher oil prices could push up inflation and affect Federal Reserve policy. The yield on benchmark US 10-year notes rose to 4.208%, extending its rise from last week. As bond yields rise, they make government bonds more attractive than stocks, creating downside potential for markets.