Both indices recorded their steepest single-day fall since April 7, 2025.
Illustration: Dominic Xavier/Rediff
Key Points
- Since the start of the war, mcap of BSE-listed firms has dropped by Rs 34 trillion to Rs 430 trillion.
- Rising crude prices and the continued blockade of the Strait of Hormuz have also heightened concerns over inflation in India, which relies heavily on oil imports.
- Since the start of the war, the market capitalisation of BSE-listed firms has dropped by Rs 34 trillion to Rs 430 trillion.
- The rupee may weaken further while inflation could rise.
- India is facing external headwinds right now, which could affect the budget deficit.
- As many as 577 stocks hit their 52-week lows during the session.
Benchmark indices tumbled about 2 per cent on Friday, capping one of the most turbulent weeks for domestic equities as investors fretted that the West Asian conflict could drag on for weeks or even months.
For the week, the Sensex dropped 5.5 per cent, its biggest weekly decline since May 2020, while the Nifty 50 fell 5.3 per cent, the sharpest fall since June 2022.
The Sensex on Friday ended at 74,564, down 1,471 points, or 1.9 per cent, while the Nifty 50 closed at 23,151, declining 488 points, or 2.1 per cent.
Both indices recorded their steepest single-day fall since April 7, 2025.
How markets reacted since the war started
Since the start of the war, the market capitalisation of BSE-listed firms has dropped by Rs 34 trillion to Rs 430 trillion.
Friday’s selloff followed a sharp spike in global oil prices a day earlier, with Brent crude, the international benchmark, surging back to the $100 a barrel mark.
On Friday, it continued to hover around that level as Iran kept the Strait of Hormuz, a vital artery for global oil and gas shipments, closed to most vessels.
Iran’s willingness to inflict global economic pain has unsettled investors, triggering net foreign portfolio investor outflows of Rs 10,717 crore on Friday alone.
Investor wealth wiped out
Although domestic investors injected nearly an equivalent amount, it did little to arrest the selloff, which wiped out Rs 10.2 trillion in investor wealth.
Rising crude prices and the continued blockade of the Strait of Hormuz have also heightened concerns over inflation in India, which relies heavily on oil imports.
The conflict involving the US-Israel and Iran is entering its third week, with around 2,000 people reportedly killed in the region, mostly in Iran.
The escalation has triggered one of the most significant disruptions to global oil supplies, with Iran attacking and blocking crude tankers in the region.
American President Donald Trump on Friday said the US was going to be hitting Iran “very hard over the next week”.
What analyst says
Domestic brokerage Nuvama said in a note that the continued closure of the Strait of Hormuz, through which about 20 million barrels per day of oil flows, could push crude prices to $110-$150 a barrel within four to eight weeks.
Despite the near-term turmoil, analysts said markets could recover once geopolitical tensions ease, citing India’s strong economic fundamentals and improving valuations following the recent correction.
“India is facing external headwinds right now, which could affect the budget deficit.
“The rupee may weaken further while inflation could rise.
“However, this does not alter the long-term structural story for India as an investment destination, given its strong demographics and its potential to benefit from the broader shift in global manufacturing,” said Joanne Goh, senior investment strategist at DBS Bank.
“Apart from that, India’s macro position is stronger than before, which reduces the impact from oil. Once this period of chaos subsides, India — like other markets affected by the crisis — should be able to recover,” she added.
Market breadth
Market breadth remained weak on Friday, with 3,439 stocks declining and 858 advancing on the BSE.
As many as 577 stocks hit their 52-week lows during the session.
Among Sensex constituents, Larsen & Toubro was the biggest drag, falling 7.5 per cent, followed by HDFC Bank, which declined 1.9 per cent. Bajaj Finserv, down 1.8 per cent, also touched its 52-week low during the day.
All sectoral indices ended in the red, with losses ranging between 0.6 per cent and 5 per cent.
