US President Donald Trump’s announcement created panic in markets across the world including India. Indian market lost more than ₹10 lakh crore in just 20 minutes. Due to Trump’s statement, Sensex fell by more than 1,900 points. His comments on Iran created so much panic among investors that selling started. The Sensex fell more than 1,900 points to 76,280, while the Nifty fell 579 points to 23,817.
**Loss of ₹10 lakh crore in 20 minutes**
At 9:15 am, the Sensex opened at 77,816 points. At 1:40 pm it was trading at 77,590 points. At 2:00 pm – about 20 minutes later – the index fell sharply to 76,700 points; This was a drop of nearly 1,000 points in just 20 minutes. At 2:45 pm, the Sensex fell 1,810.55 points to 76,370.17. Finally, it fell 1,667 points to close at 76,503.60. The reason for the turmoil in the Indian stock market on Wednesday was Trump’s decision not to make any agreement with Iran and his announcement of ending the ceasefire. Due to the market decline, the total market capitalization of BSE listed companies declined by ₹10 lakh crore to ₹470 lakh crore.
**What were the 5 main reasons for the decline in the stock market?**
Trump’s statement: The main reason for the fall in the Indian stock market today was the statement of US President Donald Trump, in which he announced to end the war with Iran. Trump’s announcement increased the possibility that hostilities between America and Iran could resume. **Crude oil prices jumped by more than 6%:** Brent crude prices jumped by more than 6% on Wednesday due to fear of war and possible blockade of the Strait of Hormuz. The price of crude oil reached $78.09 per barrel.
**Big impact of global signals on the market:** There was selling pressure in the Indian market due to weak global signals. Increasing geopolitical tension led to selling in the markets of America, Japan, South Korea, Europe and Asia, which also put pressure on the Indian market. **Treasury Yields Rise:** Treasury yields rose to 4.565%, while the 30-year bond yield reached 5.068%. The rise in bond yields reduced investors’ enthusiasm for equities.
**Rupee weak:** Today the rupee weakened further against the US dollar and fell below the level of 95.50. The weakness of the rupee has had a negative impact on the market.
**What will happen next?**
It is clear from Trump’s statements that he is no longer ready to make any deal with Iran. He has also announced to end the ceasefire. The US President’s comments indicate a resumption of confrontation. America has targeted 80 places in Iran. In response, Iran may announce the closure of the Strait of Hormuz again. Attacks on tankers in the Strait of Hormuz have halted traffic, the impact of which is visible on oil prices today; Prices have increased due to interruption in supply. If Iran re-imposes blockade on the Strait of Hormuz, India may face an oil and gas crisis.
**What will be the impact on India?**
India imports 80% to 85% of its crude oil needs, a large portion of which comes through the Strait of Hormuz. Moreover, imports meet about 60% to 66% of the LPG supply and half of the natural gas requirement. Given the current situation, increasing tension in the Strait of Hormuz may once again put India in an energy crisis. Although India has significantly diversified its energy imports – sourcing crude from more than 40 countries – the strategic importance of the Strait of Hormuz has not diminished. Currently, nine Indian ships and 198 Indian sailors are stranded in this area. 60% of India’s crude oil imports come through the Strait of Hormuz, and natural gas purchased from Gulf countries like Qatar and Kuwait also reaches India through this route. In addition, the supply of fertilizers, raw materials, limestone and other commodities depends on the Hormuz Corridor. If this route is completely closed, an energy crisis may arise.
