Geopolitical Tensions Trigger Sharp Sell-Off on Dalal Street, Sensex Plunges 1,353 Points
MUMBAI: A deteriorating geopolitical situation in West Asia, combined with weak market conditions globally, sparked a sharp sell-off on Dalal Street early Monday, causing the benchmark Sensex to plummet nearly 2,500 points. However, stocks managed to recover some of those losses later in the session as traders speculated about an upcoming address by US President Donald Trump early Tuesday.
At the close of trading, the Sensex was down 1,353 points, or 1.7%, settling at 77,566 points. This marked its lowest closing level since April 16, 2025. On the National Stock Exchange, the Nifty followed a similar trajectory, closing at 24,028 points, down 422 points, or 1.7%.
Fourth Session of Losses in Five Days
For both indices, Monday represented the fourth session of losses in the last five trading days since the conflict began on February 28. Over the weekend, as the war entered its second week, the US-Israel alliance intensified its bombardment of Iran with bombs and missiles, prompting heavy retaliation from Iran. Iran's counterattacks primarily targeted US military assets across Gulf nations and surrounding areas.
This escalation led to almost all Asian markets opening deep in the red, which severely impacted investor sentiment on Dalal Street. Trading for the new week commenced with heavy selling pressure, resulting in investors losing nearly Rs 8.6 lakh crore by the session's end. The Bombay Stock Exchange's market capitalisation now stands at Rs 441.1 lakh crore.
Expert Analysis on Market Downturn
According to Ajit Mishra, Senior Vice President of Research at Religare Broking, the domestic market extended its recent downtrend due to negative global cues and rising geopolitical tensions. Since the war started on February 28, the Sensex has lost a little over 3,700 points, or 4.6%.
"Investor sentiment remained fragile due to escalating geopolitical tensions in West Asia, which triggered a sharp surge in crude oil prices, with Brent crude testing the $119.5 mark. This raised significant concerns over inflation and economic growth," Mishra explained. "The spike in oil prices, weakness in the rupee, and continued foreign fund selling further intensified the sell-off in domestic equities."
Foreign and Domestic Fund Activity
Data from the Bombay Stock Exchange revealed that foreign funds were net sellers at Rs 6,346 crore on Monday, while domestic funds acted as net buyers, purchasing Rs 9,014 crore worth of equities.
Among the 30 Sensex stocks, 25 ended the day in negative territory. The major contributors to the index's decline were:
- ICICI Bank
- HDFC Bank
- State Bank of India (SBI)
On a positive note, five stocks managed to close with gains, led by Reliance Industries, which provided some cushion against the broader market fall.
