Sensex Plunges 2,700 Points at Open, Wiping Out ₹8 Lakh Crore in Investor Wealth

Indian Stock Market Plunges Amid Escalating Tensions in West Asia

Market Performance

• The BSE Sensex opened 2,743 points, or 3.34%, lower at 78,543.73 on Monday, March 2.
• The NSE Nifty 50 crashed over 500 points, or more than 2%, to hit an intraday low of 24,645, before paring losses to trade 271 points, or 1.08% lower at 24,908 around 9:25 am.

Market Capitalisation

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• Investors lost more than ₹8 lakh crore within the first few minutes of Monday's session as the overall market capitalisation of BSE-listed firms dropped to ₹455 lakh crore from ₹463.50 lakh crore in the previous session.

Key Factors Behind the Market Crash

1. US-Iran War Jitters

• Escalating tensions in West Asia, including the US-Iran conflict, have led to fears of a prolonged war, which could have a medium-term impact on the market.

2. Crude Oil Prices Surge

• Crude oil prices have jumped sharply to multi-month highs, with Brent crude surging above $82 and West Texas Intermediate climbing to $75 a barrel.

3. Rupee Reaches Record Low

• The Indian rupee has surpassed the 91 per dollar mark, with a 28-paise fall to 91.26 per dollar.

4. FIIs Resume Aggressive Selling

• Foreign institutional investors (FIIs) have resumed aggressive selling of Indian equities, with net sales of ₹11,002 crore in February.

Impact on the Economy

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• A sharp jump in crude prices can widen India's current account deficit, weaken the Indian rupee, raise inflation, and accelerate foreign capital outflows.
• Experts expect the Reserve Bank of India (RBI) to intervene to stem the currency's decline.