Amid the fall in US and Asian markets, the Indian stock market witnessed a huge fall since Friday morning. Sensex, which opened with a fall of nearly 400 points at the beginning of the trading session, saw its fall deepen by the afternoon. At one time the Sensex had fallen by almost 1,400 points. Nifty 50 also saw a fall of about 400 points. Due to this decline, the market capitalization of companies listed on BSE reduced by ₹8 lakh crore. On Wednesday evening—after the stock market surge—the total market capitalization of these companies stood at ₹431 lakh crore; Today it has fallen to ₹423 lakh crore. A decline is also being seen in Midcap and Smallcap indices. Let us understand the reasons behind today’s fall in the stock market:
weakness in global markets
The fall in US markets has also affected Asian markets amid uncertainty over the ongoing conflict in West Asia. After the S&P 500 and Nasdaq fell 2% in the morning, Korea’s Kospi and Japan’s Nikkei also saw heavy selling.
Contradictory reports on West Asia conflict
Investors are still nervous due to contradictory reports regarding the ongoing conflict between Iran and Israel. According to reports, US President Donald Trump has suggested postponing the attack on Iran’s energy facilities until April 6. However, media reports suggest that Israel is intent on destroying Iran’s military-industrial infrastructure. Due to such contradictory reports, investors have adopted a cautious approach.
Rupee at record low against dollar
The Indian Rupee has fallen to a record low of 94.1575 against the US Dollar. This is the lowest ever level of rupee. Since the conflict between Iran and Israel began, the rupee has fallen by about 3.5%. The weakening of the rupee has also created an atmosphere of uncertainty among investors.
Rise in crude oil prices
Crude oil markets continue to be volatile, with prices recently reaching as high as $122 per barrel. Today, Brent crude prices remain stable at $108 per barrel. As a result, it may take some time for Indian companies’ earnings to get back on track. Goldman Sachs has lowered its India Inc’s earnings growth forecast for fiscal year 2026 (FY26). Due to this also, there is a recessionary atmosphere in the stock market.
FPI withdrawing money from the market
The stock market continues to remain weak due to continuous selling by foreign portfolio investors (FPIs). Since the conflict began, foreign investors have pulled out a total of ₹1,23,688 crore from the market. In the fortnight ended March 15, equity assets of FPIs declined by $79 billion to $710 billion.