The Indian stock market witnessed its most severe crash in over a year on Monday as escalating war in the Middle East pushed crude oil prices above $118 per barrel, eroding over Rs 12 lakh crore in investor wealth within minutes of trading.

The benchmark BSE Sensex plunged nearly 2,400 points (3%) to 76,424, while the Nifty 50 tumbled over 700 points to breach the 23,800 level in early trade. The bloodbath extended last week’s losses, triggered by the intensifying US-Israel-Iran conflict that has effectively shut the Strait of Hormuz, through which 20% of the world’s oil supply passes .

Why Stock Market Falling Today: Five Key Factors Behind the Crash

1. Crude Oil Price Today Breaches $100-Mark for First Time Since 2022

Brent crude price today surged 27% to $118.22 per barrel, while West Texas Intermediate (WTI) jumped 30% to $118.21 in early Asian trade . This marks the first time since Russia’s invasion of Ukraine in 2022 that oil prices have crossed the critical $100 threshold.

The price shock stems from escalating hostilities in the Middle East, with several oil tankers bombed in the Strait of Hormuz region. Iraq and Kuwait have begun cutting oil output, adding to earlier liquefied natural gas reductions from Qatar as the war blocks Middle East shipments .

2. US Iran War Impact on Indian Stock Market Intensifies

The US Iran war impact on Indian stock market has become the dominant concern for investors. The conflict entered its 10th day after significant escalation over the weekend. Iran named Mojtaba Khamenei to succeed his father, Ayatollah Ali Khamenei, as the country’s supreme leader, signalling that hardliners remain firmly in control .

US and Israeli forces attacked several oil depots in Tehran, with videos showing plumes of smoke lighting up the night sky. Iran has retaliated with drone attacks targeting other Gulf nations. With no signs of diplomatic resolution, global investors remain spooked .

3. Asian Markets Live: Nikkei, KOSPI in Free Fall

The sell-off is not limited to India. Asian markets live updates show a regional bloodbath:

South Korea’s KOSPI plunged nearly 8%, triggering trading halts
Japan’s Nikkei 225 tumbled 6.4% below the 52,000 mark
Hong Kong’s Hang Seng declined over 2%
Taiwan and Shanghai indices fell sharply

GIFT Nifty today traded around 23,811, pointing to the steep decline at opening .

4. Rupee vs Dollar Today Hits Record Low

The rupee vs dollar today opened near record lows at 92.1975, marking a 0.5% fall from the previous close of 91.74 . The currency remains under pressure as the oil shock threatens to widen India’s trade deficit and stoke inflation.

Pricing in the 1-month non-deliverable forward market points to USD/INR around 92.30–92.35, weaker than Friday’s levels . The Reserve Bank of India is widely expected to intervene to smooth volatility, but underlying pressure may persist if oil prices remain elevated.

5. FII Selling Intensifies

Foreign Institutional Investors have stepped up selling in Indian equities. In the week ending March 6, FIIs offloaded ₹21,831 crore, marking their third consecutive week of net selling . On Friday alone, foreign investors sold shares worth ₹6,030 crore ($654 million), completely absorbing the ₹6,972 crore in rescue purchases made by domestic funds .

Sectoral Impact: Who Got Hit the Hardest?

All sectoral indices were deep in the red, with the Nifty PSU Bank index crashing over 5% to emerge as the top sectoral loser. Nifty Auto plunged around 4%, while Nifty Realty and Nifty Private Bank indices were down over 3% each .

Individual stocks saw sharp declines:

IndiGo shares led losses, falling nearly 8% on concerns over higher aviation fuel costs
Tata Steel, L&T, SBI, and Maruti Suzuki dropped around 5% each
Oil marketing companies faced selling pressure due to rising crude prices

Investor Wealth Erosion: ₹12.39 Lakh Crore Wiped Out

The sharp selloff wiped off more than ₹12.39 lakh crore from the total market capitalisation of all companies listed on BSE within less than 10 minutes of opening, dragging it down to ₹437 lakh crore .

This follows last week’s losses when eight of the ten most valued companies together saw their market capitalisation shrink by ₹2.81 lakh crore .

What Experts Say: Nifty Support Level Today and Outlook

“The markets are reacting to unprecedented geopolitical events in the Gulf,” said Nilesh Shah, MD of Kotak Asset Management. “The Street is concerned about price as well as availability of oil and safety of our nine million plus citizens in West Asia and the flow of remittance” .

Pravesh Gour, Senior Technical Analyst at Swastika Investmart, added: “Escalating Middle East tensions are battering sentiment, with broad-based selling and risk aversion likely across sectors. Persistent foreign investor outflows and a weakening rupee were compounding the pressure” .

Regarding Nifty support level today, technical analysts suggest 23,500 as the next crucial support, with resistance at 24,200. However, much depends on geopolitical developments.

Economic Impact: Inflation Fears and Policy Implications

For India, the world’s third-largest crude importer, the spike in energy costs presents a severe macroeconomic headwind. The surge threatens to:

Widen the government’s fiscal deficit
Compress corporate margins through higher input costs
Place renewed depreciation pressure on the rupee
Reignite inflation, potentially preventing the RBI from cutting interest rates

Even if hostilities ease soon, economists warn that damaged infrastructure, disrupted logistics, and elevated shipping risks could saddle global businesses and consumers with high fuel prices for months .

What Investors Should Do Now

Market participants should prepare for continued volatility as geopolitical tensions continue to dominate market thinking. Trends in FII flows and currency movements will also be closely watched, as they often reflect broader shifts in global capital allocation and confidence in emerging markets .

Analysts advise caution rather than panic selling, suggesting investors wait for stability before making fresh commitments. The best stocks to buy during market crash remain a topic of debate, with defensive sectors like IT and pharma showing relative resilience.

Disclaimer: The views and investment tips expressed by investment experts are their own and not those of the website or its management. Readers should consult certified experts before taking investment decisions.