Stock market crash: A massive sell-off engulfed the Indian stock market on Thursday morning (March 19), causing the benchmark indices—the Sensex and the Nifty 50—to snap their three-day streak of impressive gains.
The Sensex plunged over 2,000 points, or nearly 3%, to an intraday low of 74,685, while the Nifty 50 plunged 600 points, or 2.5%, to the day’s low of 23,180.95.
The BSE 150 Midcap and the BSE 250 Smallcap indices crashed 2% each.
Investors’ wealth was eroded by more than ₹7 lakh crore as the overall market capitalisation of BSE-listed firms dropped to ₹432 lakh crore from ₹439 lakh crore in the previous session.
Why is the Indian stock market falling?
Let’s take a look at the key factors behind the stock market crash today:
1. US-Iran war intensifies further
Contrary to expectations of an imminent end, the US-Iran war, which began on February 28, has been intensifying, dealing a blow to global market sentiment.
According to media reports, after a strike on one of Iran’s major gas facilities, Iranian President Masoud Pezeshkian warned of “uncontrollable consequences” that “could engulf the entire world”.
Both sides are now targeting energy facilities, driving up crude oil and gas prices.
2. Crude oil prices above $110 per barrel
Brent oil futures jumped more than 5% to hit $113 per barrel, further aggravating concerns of a global inflation flare-up that could lead to tighter monetary policy, weaker consumption, and lower corporate profitability.
Crude oil prices have jumped again amid concerns of a major supply shock following fresh attacks on key energy infrastructure in the Middle East.
3. HDFC Bank saga
To some extent, the HDFC Bank episode is also contributing to market pessimism. The bank’s chairman, Atanu Chakraborty, has resigned with immediate effect, citing “certain happenings and practices within the bank” that were “not in congruence” with his personal values and ethics.
HDFC Bank share price crashed more than 8% to hit its 52-week low of ₹772 on the BSE on Thursday.
Meanwhile, HDFC Bank is hosting a call with analysts and investors today (March 19), in relation to the resignation of the chairman and other things.
4. The Fed factor
The US Federal Reserve kept the benchmark interest rates steady on March 18, signalling that the Middle East war has created a challenging environment, and its impact on the US economy remains uncertain.
The Fed also slightly revised the inflation forecast upward and indicated that there may be one rate cut of 25 basis points in 2026, dashing the market expectations of at least two cuts this year.
Some experts believe the US Fed may not cut rates this year due to increased inflationary risks.
“It is likely that the Fed will be on an extended pause until there is more clarity around the effects of the Iran crisis and fading tariff inflation,” said Madhavi Arora, Chief Economist for Emkay Global Financial Services.
5. Rupee crashes to record low
The Indian rupee crashed 49 paise to a fresh record low of 92.89 against the US dollar in early trade on Thursday, as per PTI.
Rupee’s weakness hit market sentiment significantly, as it can further aggravate foreign capital outflows, which have already been intense, by reducing the returns of foreign investors. Moreover, it also raises inflationary pressure, which can lead to higher interest rates.
Other factors
Apart from these factors, massive foreign capital outflows, lingering concerns about the impact of crude oil prices on the domestic economy, and weak global cues are also adding to the market selloff.
Major Asian markets crashed by up to 3% after Wall Street indices fell by over 1% overnight.
Foreign institutional investors (FIIs) have been aggressively selling Indian equities in the cash segment amid currency weakness and concerns over a delayed earnings recovery, as rising crude oil prices stoke inflationary pressures.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
