Surat Wealth Management：Rs 10 lakh crore wiped out as Sensex plunges over 1,700 points; 4 key factors behind today’s market crash

Benchmark equity indices closed sharply lower on Thursday, with the Sensex plunging over 1,750 points and the Nifty50 slipping to the 25,250 mark as investors trimmed their risk exposure amid escalating tensions in the Middle EastSurat Wealth Management. Losses across all sectors weighed heavily on the key indices.

The 30-share BSE Sensex dropped 1,769 points, or 2.1%, to close at 82,497, while the broader NSE Nifty fell 546 points, or 2.12%, to settle at 25,250.

The market capitalisation of all listed companies on the BSE declined by Rs 9.71 lakh crore to Rs 465.15 lakh crore.

Investor concerns grew after Iran launched ballistic missiles at Israel earlier in the week, raising fears that an escalation could disrupt oil supplies from the region.

Oil prices ticked higher on the dayMumbai Wealth Management. A rise in oil prices is a negative for importers of the commodity like India, as crude contributes significantly to the country's import bill.

Among Sensex stocks, Reliance Industries, HDFC Bank, L&T, Axis Bank, and ICICI Bank collectively dragged the index down by 1,015 points, with JSW Steel being the only gainer.

The Nifty Oil & Gas index closed more than 2.7% lower, impacted by concerns over the escalating Middle East conflict.

Hindustan Petroleum, Oil India, and BPCL were the top laggards on the index, declining by 5-7%. Meanwhile, the fear gauge, India VIX, surged 9.86% to reach 13.17.

Here are the key factors behind today's meltdownMumbai Stock Exchange

Indian stocks declined on Thursday amid rising concerns over the escalating hostilities between Iran and Israel. Reports indicate that the Israeli military has confirmed the deaths of eight soldiers, including a team commander, during ground operations in southern Lebanon.

This escalation follows Iranian missile attacks targeting Tel Aviv, with Israel's military chief warning of an imminent response.

"The domestic market took a sharp downturn following Iran’s launch of ballistic missiles at Israel, sparking fears of retaliation and escalation in war. This could potentially drive up oil prices and lead to inflationary pressures," said Vinod Nair of Geojit Financial Services.

Oil prices increased amid concerns that escalating tensions in the Middle East could threaten supplies from major producers. Brent crude briefly surpassed $75 per barrel, while West Texas Intermediate topped $72, with both benchmarks rising nearly 5% over the past three days.

A rise in oil prices is a negative for importers of the commodity like India, as crude contributes significantly to the country's import bill.Pune Investment

"The situation will change if Israel attacks any oil installations in Iran which will trigger a huge spike in crude. If it happens, it can turn out to be more damaging for oil importers like India. Therefore, investors should watch the emerging situation very closely," said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The recent decision by market regulator Sebi to tighten rules in the futures and options (F&O) segment has also contributed to the decline in equity markets today. Analysts stated that these new measures, which include limiting weekly expiries to one per exchange and increasing contract sizes, may dampen retail sentiment and reduce trading volumes.New Delhi Wealth Management

This uncertainty around trading dynamics has likely fueled investor concerns, adding to the market's downward pressure amid broader geopolitical tensions.

Investors in India are increasingly worried about the resurgence of Chinese stocks, which have underperformed in recent years. Following the announcement of economic stimulus measures by the Chinese government last week, analysts predict sustained growth in Chinese stocks, prompting a potential outflow of funds from India.

The SSE Composite index rose 8% on Tuesday and has gained over 15% in the past week. As a result, foreign institutional investors have withdrawn Rs 15,370 crore from Indian equities in the last two trading sessions.

"With attractive valuations in China, FIIs have redirected their funds, adding pressure on Indian stocks," Nair said.

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