The BSE Sensex plunged 1,386 points, while the Nifty 50 dropped 405 points during intraday trade. What began as a positive trading session quickly turned volatile, with heavy selling emerging by mid-afternoon.
The sell-off led to a significant erosion in investor wealth. The total market capitalisation of listed companies fell sharply, resulting in an estimated loss of ₹7.30 lakh crore in a single session.
Profit Booking After Three-Day Rally
Market participants attributed the fall primarily to profit booking after three days of strong gains. Investors chose to lock in profits, triggering broad-based selling across large-cap, mid-cap, and small-cap stocks.
Banking stocks remained under pressure, adding to the overall weakness. Rising volatility ahead of the weekend further dampened investor sentiment.
US–Iran Tensions Rattle Global Markets
A fresh wave of global uncertainty weighed heavily on sentiment after reports suggested a potential escalation in tensions between the US and Iran. According to international media reports, the US military could consider launching a strike on Iran, with speculation that any action might evolve into a prolonged military campaign.
The geopolitical developments have put global financial markets on alert. Investors are closely monitoring the situation, wary of sudden volatility and its possible impact on oil prices, global trade, and risk assets.
Market experts noted that many traders reduced exposure ahead of the weekend to safeguard portfolios from unexpected geopolitical shocks.
Crude Oil Prices Add to Pressure
Crude oil prices remained elevated amid fears of disruption in the Middle East. Higher oil prices typically raise input costs for businesses and widen India’s import bill, thereby exerting pressure on corporate earnings and the broader economy.
With geopolitical uncertainty intensifying and volatility on the rise, market participants are expected to remain cautious in the near term.