Market meltdown: Rs 48 lakh crore wiped out as Middle East crisis rattles Dalal Street

Investor wealth worth Rs 48.29 lakh crore has been wiped out in India since the onset of the West Asia war on February 28, with domestic equity markets plunging sharply on Monday amid escalating geopolitical tensions, surging crude oil prices and sustained foreign outflows. The BSE Sensex on Monday dived 1,836.57 points, or 2.46 per cent, to close at 72,696.39, while the NSE Nifty fell 601.85 points, or 2.60 per cent, to settle at 22,512.65, reflecting deepening risk aversion among investors. Broader markets fared worse, with the BSE MidCap Select index dropping 3.82 per cent and the SmallCap Select index declining 3.66 per cent. All sectoral indices ended in the red, led by consumer durables, which tumbled 4.91 per cent, followed by metal (4.76 per cent), realty (4.75 per cent), services (4.70 per cent) and PSU banks (4.39 per cent). Market breadth remained decisively negative, with 3,798 stocks declining against 635 advances on the BSE. "The sharp fall was primarily driven by weak global cues, escalating geopolitical tensions in the Middle East, and a surge in crude oil prices, which dampened investor sentiment. Additionally, continued FII selling and weakness in the Indian rupee further added to the negative momentum," Aakash Shah, technical research analyst at Choice Equity Broking, said. Since the conflict began, the Sensex has tumbled 8,590.8 points, or 10.56 per cent, while the Nifty has dropped 2,666 points, or 10.58 per cent. The total market capitalisation of BSE-listed companies has shrunk to Rs 415 lakh crore from Rs 463 lakh crore, translating into an erosion of Rs 48.29 lakh crore in investor wealth. "The deepening Strait of Hormuz crisis, sustained pressure on the rupee, elevated energy prices, and continued foreign outflows are collectively driving a negative sentiment cycle," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said. The sell-off follows the escalation of conflict in West Asia after the United States and Israel launched military strikes on Iran on February 28, reportedly killing Supreme Leader Ayatollah Ali Khamenei. Iran has since retaliated with attacks targeting Israeli and US military bases across several Gulf countries, including the UAE, Bahrain, Kuwait, Jordan and Saudi Arabia. The crisis has also threatened the Strait of Hormuz — a critical oil transit chokepoint between Iran and Oman — raising fears of supply disruptions and further fuelling volatility in global energy and financial markets.

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