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At 9:16 am, the BSE Sensex falls 750 points, or 0.98%, at 76,193.82, while the Nifty declines 235 points, or 0.98%, to 23,820.75.
Stock market today.
The sharp sell-off in Indian equities wiped out nearly Rs 5 lakh crore from the total market capitalisation of BSE within minutes of the market opening, taking it down to around Rs 488 lakh crore.
Indian markets came under heavy selling pressure on September 2, with the Sensex falling nearly 750 points and the Nifty dropping close to 1% in early trade. The sell-off was broad-based, with investors reacting to escalating geopolitical tensions, a sharp rise in crude oil prices, higher global bond yields and renewed concerns over inflation and interest rates.
At 9:16 am, the BSE Sensex was down 750 points, or 0.98%, at 76,193.82, while the Nifty declined 235 points, or 0.98%, to 23,820.75. The broader market also weakened, with the Nifty Midcap 100 falling 1.22% and the Nifty Smallcap 100 declining 1%. The India VIX, which measures expected market volatility, rose 2.84% to 11.82, reflecting heightened investor nervousness.
The immediate trigger for the sell-off is the latest escalation in the US-Iran conflict. Fresh US strikes on Iranian targets and Iran’s subsequent response have heightened concerns that the conflict could drag on and threaten energy supplies from the Middle East.
The escalation has prompted investors globally to reduce exposure to riskier assets. Asian markets also came under significant pressure, with Japan’s Nikkei and South Korea’s Kospi falling sharply by 2.2% and 3%, respectively, in early trade.
Oil prices surged as markets priced in the possibility of supply disruptions and reduced shipping through the Strait of Hormuz, one of the world’s most important oil transit routes. Brent crude briefly approached $97 a barrel after gaining more than $4 on Tuesday.
The spike in oil prices is particularly negative for India, which relies heavily on imported crude. A sustained rise in oil prices could increase the country’s import bill, add to inflationary pressures and squeeze corporate profit margins.
“Indian markets are likely to remain under pressure as surging crude oil prices and rising global bond yields continue to weigh on investor sentiment amid the escalating conflict in the Middle East. While India’s resilient domestic growth outlook provides an underlying cushion, external macroeconomic and geopolitical risks are expected to dominate near-term market direction, keeping the broader outlook cautious,” said Ponmudi R, CEO of Enrich Money, a Sebi-registered online trading and wealth-tech firm.
The sell-off in global bonds is another key factor weighing on equities. The US 10-year Treasury yield has moved towards 4.8%, its highest level since January 2025, while longer-duration yields have also risen.
Higher bond yields make fixed-income assets relatively more attractive compared with equities. They also increase the discount rate used to value future corporate earnings, putting greater pressure on high-valuation growth and technology stocks.
For India, rising US yields can make emerging-market assets less attractive and encourage global investors to shift capital towards US fixed-income securities.
“The big threat is the rising bond yields in the US. The macro construct in the US indicates further hardening of the bond yields. If the 10-year yield touches 5% that has the potential to trigger a big correction in equity markets globally. Therefore, this is the macro indicator to watch closely. The near-term market trend will depend on which of these forces – the tailwinds or headwinds – will emerge stronger,” said V K Vijayakumar, chief investment strategist at Geojit Investments Ltd.
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