Monday proved to be “Black Monday” for the stock market. Due to increasing tension in the Middle East and Iran-Israel conflict, the domestic stock market collapsed like a house of cards. Investors suffered a loss of about ₹11 lakh crore in this fall. During the day’s trading, the BSE Sensex fell more than 1,800 points below the 79,500 level. NSE Nifty was also trading below the level of 24,650, falling by more than 2%. As soon as the market opened, the selling pressure was so high that at one point the Sensex fell by 2,743 points.
Investors suffered a loss of ₹10 lakh crore
There was such a huge fall in the market on Monday that about ₹10 lakh crore was lost from its market cap. The total market cap of companies listed on BSE, which was ₹4,63,25,200 crore at market close on Friday, fell to ₹4,52,10,871 crore on Monday afternoon. This means that the total market cap declined by more than ₹10 lakh crore. However, the situation improved later.
Four big reasons for market decline
Iran-Israel War: Tension is high in the region after the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, in an alleged missile attack over the weekend. After this move by US and Israel, Iran has started retaliatory attacks, which has increased uncertainty in this oil-rich region.
Crude oil prices on fire: Due to fear of supply disruption due to war, Brent crude prices have increased by 6% in the international market to more than $77 per barrel. Experts believe that if the situation does not improve, oil prices may reach $100. Rupee falls sharply: Indian rupee crossed one-month low of Rs 91 per dollar for the first time due to selling by foreign investors and high oil prices.
Selling by Financial Institutional Investors (FII): Foreign Institutional Investors (FII) are continuously withdrawing money from the Indian market, due to which the market environment has deteriorated.
Defense stocks shine despite sharp decline
Market majors like Maruti Suzuki, Indigo and L&T saw a sharp fall of 4 to 7%. The auto and oil and gas sectors were most affected. However, amid war news, buying was seen in defense sector shares and shares of Bharat Electronics (BEL) closed with gains.
What should investors do now?
Amidst this market turmoil, experts have advised investors to be patient. Market experts have consistently called panic selling a wrong strategy during times of crisis. “History shows that crises like wars or epidemics do not impact the market for six months,” he said. Experts say that if the market falls further, it could be an opportunity to gradually buy good quality banking, defense and auto stocks.