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Indian equity markets opened sharply lower on Monday, with benchmark indices extending last week’s losses
Stock Market Crash
Why Is Market Falling Today? Indian equity markets opened sharply lower on Monday, with benchmark indices extending last week’s losses amid escalating tensions between Iran and the US-Israel bloc, which have reignited a surge in global oil prices.
Sensex crashed over 1,214 points to 72,357, while the Nifty 50 sank 355 points to 22,464 at 11.50 am. The sharp selloff wiped off around Rs 7 lakh crore from the total market capitalisation of all companies listed on BSE, dragging it down to Rs 415 lakh crore.
Crude surge fuels market worries
Brent crude jumped about 3% to $115.98 per barrel, taking its monthly gains to nearly 60%—surpassing the spike seen after Iraq’s invasion of Kuwait in 1990. US crude also rose around 3% to $102.52, marking a monthly increase of over 50%.
The ongoing US-Israel conflict with Iran has now entered its fifth week and widened further, with Yemen’s Iran-backed Houthi group launching attacks on Israel over the weekend. The escalation has intensified fears of disruptions to key shipping routes around the Arabian Peninsula and the Red Sea.
While Pakistan has indicated plans to host “meaningful talks” to end the conflict, Iran has warned it is prepared to respond if the US deploys ground troops.
VK Vijayakumar of Geojit Investments said the conflict has significantly altered India’s macro outlook. “The earlier Goldilocks scenario of high growth and low inflation has weakened. Now, risks of slower growth, higher inflation, wider deficits and softer earnings are emerging,” he said, adding that valuations have corrected but are not yet cheap, though segments like financials appear attractive.
Earnings risks mount
Analysts warn that sustained disruptions—especially around the Strait of Hormuz—could hurt multiple sectors.
Mahesh Nandurkar of Jefferies said a prolonged disruption could result in more than a 10% earnings hit for oil marketing companies, airlines, cement, paints and related sectors. He also expects FY27 GDP growth to be lower by about 50 basis points, with corporate earnings potentially cut by 2–2.5%.
Banking stocks under pressure
Banking stocks came under sharp pressure, with the Nifty Bank falling over 2% after the Reserve Bank of India tightened norms on banks’ foreign exchange exposure.
The RBI has capped lenders’ net open rupee positions in the forex market at $100 million per day, prompting banks to unwind arbitrage trades built between onshore and non-deliverable forward (NDF) markets.
This unwinding is expected to trigger dollar selling in the domestic market, even as volatility in the rupee remains elevated due to oil-linked pressures. The size of such arbitrage positions is estimated between $25 billion and $50 billion.
Foreign outflows persist
Foreign investors continue to exit Indian equities, reflecting a broader risk-off sentiment. Provisional data showed net selling of ₹4,367 crore on Friday alone.
VK Vijayakumar noted that FPIs have been net sellers throughout March, with total outflows exceeding ₹1.18 lakh crore so far. The selling has been driven by weak global cues, rupee depreciation, concerns over remittances from the Gulf and the impact of elevated crude prices on growth and earnings.
Volatility spikes ahead of expiry
With the monthly Nifty F&O expiry on March 30, market volatility is expected to remain elevated. The India VIX has risen over 8% to 28.78. Markets will remain closed on March 31 due to a public holiday.
Technical outlook remains cautious
Analysts advise a cautious and selective approach in the near term. Hitesh Tailor of Choice Broking said investors should focus on accumulating fundamentally strong stocks on meaningful declines rather than chasing short-term rebounds.
He added that fresh long positions should ideally be considered only if the Nifty 50 decisively crosses and sustains above the 24,000 level, which would signal improving sentiment and a more stable recovery.
March 30, 2026, 11:00 IST
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