Sensex Plunges 850 Points, Nifty Below 23,100 Amid Global Concerns

Sensex Plunges 850 Points, Nifty Below 23,100 Amid Global Concerns​

Mumbai, March 27 – The Indian stock market experienced a significant downturn today, with the Sensex and Nifty indices falling over 1% each. The Sensex closed down 847.03 points or 1.13% at 74,426.42, while the Nifty dropped 252.15 points or 1.08% at 23,054.30. Approximately 749 shares advanced, 2161 shares declined, and 195 shares remained unchanged.

Key Factors Driving Market Decline​

The market’s slide was attributed to a confluence of factors, including geopolitical uncertainty, a global equity selloff, and elevated crude prices. Concerns surrounding the Iran-US conflict were a primary driver, with US President Donald Trump extending a pause on attacks against Iran’s energy plants into April. However, Iranian officials expressed dissatisfaction with the proposed terms of an end to the war.

Global markets mirrored the Indian sentiment, with US equities falling nearly 2% and Asian benchmarks declining by 0.8%. Technology stocks in South Korea and Taiwan experienced notable drops, with Samsung Electronics Co. and SK Hynix Inc. leading the decline in South Korea.

Crude Prices and Geopolitical Risk​

Crude oil prices remained a significant concern, with Brent crude jumping almost 6% and WTI gaining 4.6% earlier in the week, fueled by fears of further escalation in the Middle East. Despite a 1.7% fall in Brent to approximately $106 a barrel, the market remained wary. The Pentagon is reportedly considering sending up to 10,000 additional ground troops to the Middle East, further adding to market volatility.

Rupee Weakness​

Adding to the pressure, the Indian rupee hit a record low, falling to 94.25 per dollar, surpassing its previous all-time low of 93.98. This decline was attributed to concerns about the energy supply crisis sparked by the Middle East conflict and its potential impact on India’s import bill. Foreign investors remained net sellers despite a recent rally in equities. Analysts predict a near-term trading range of 93.70 to 94.50 for the rupee.

“The Indian economy is strong enough to absorb the shock if the war ends, crude cools down and gas availability becomes normal. But if the war prolongs, crude remains elevated for months together, and gas availability constraints continue, the stress on India’s macros will be significant and the market will discount that. In brief, everything boils down to how long the war will last,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.