Winning Bizness Desk
Mumbai. India’s stock market witnessed its steepest decline in nearly two years on March 19, as benchmark indices plunged amid global turmoil and domestic triggers. The Sensex dropped 2,497 points, or 3.26%, to close at 74,207, while the Nifty fell 776 points by the same percentage to settle at 23,002. The sharp sell-off was led by heavy dumping in banking and auto stocks, reflecting rising investor anxiety over global developments and corporate concerns.
Banking and auto stocks lead sharp sell-off
The day’s fall was primarily driven by intense selling pressure in banking and automobile stocks, which bore the brunt of investor exit. Market sentiment turned cautious as fears of rising inflation and weakening corporate earnings gained ground amid geopolitical tensions. Historically, such uncertainty leads investors to pull money out of equities and move towards safer assets, triggering widespread declines across indices.
Global tensions and oil surge weigh heavily
Escalating conflict involving the United States, Israel and Iran has disrupted global supply chains, pushing crude oil prices sharply higher. Brent crude surged over 6% to cross 114 dollars per barrel, while the Indian basket climbed as high as 146 dollars per barrel. Rising oil prices directly impact inflation and corporate profitability, making equities less attractive.
Key reasons behind the market crash:
- Supply chain disruptions due to ongoing war situation
- Sharp rise in crude oil prices globally
- Weak cues from US and Asian markets
- Investor shift towards safer investment avenues
HDFC Bank stock falls after chairman exit
Adding to the pressure, HDFC Bank shares declined 5.11% after part-time chairman and independent director Atanu Chakraborty resigned late Wednesday. The stock fell by Rs 43 to Rs 800. In his resignation note, Chakraborty cited concerns over certain developments within the bank that did not align with his personal values and ethics. Following his exit, Keki Mistry has been appointed interim chairman for three months starting March 19, subject to regulatory approval.
Investors lose Rs 13 lakh crore wealth
The sharp fall wiped out massive investor wealth in a single session. The total market capitalisation of BSE-listed companies dropped from Rs 439 lakh crore to Rs 426 lakh crore, eroding nearly Rs 13 lakh crore in one day. Since the beginning of the Iran conflict, the Sensex has already corrected around 9%, indicating sustained pressure on the markets.
Global markets decline and crude benchmarks explained
Global cues remained weak, further dragging Indian equities lower.
Asian markets:
- Japan’s Nikkei fell 3.38%
- South Korea’s Kospi declined 2.73%
- Hong Kong’s Hang Seng dropped 2.02%
- China’s Shanghai Composite slipped 1.39%
US markets (March 18):
- Dow Jones fell 768 points
- Nasdaq declined 1.46%
- S&P 500 dropped 1.36%
Crude oil is traded globally through three key benchmarks — Brent, WTI and OPEC basket. Brent, sourced from the North Sea, sets pricing for two-thirds of global oil trade. WTI is the US benchmark known for its high quality, while the OPEC basket represents an average of crude produced by member nations like Saudi Arabia, Iran and Iraq. India, however, calculates its own ‘Indian basket’ as an average of oil imported from multiple countries including Iraq, Saudi Arabia, Russia and the UAE.
Previous session saw gains before sharp reversal
The sharp fall comes a day after markets had closed in the green. On March 18, the Sensex had gained 633 points to settle at 76,704, while the Nifty rose 197 points to 23,778, supported by buying in IT and realty stocks. The sudden reversal highlights the fragile nature of current market conditions, heavily influenced by global uncertainties and domestic developments
