India's Stock Market Suffers Rs 34 Lakh Crore Loss Amid West Asia Conflict
Two weeks into the ongoing war in West Asia, investors in India have witnessed a staggering loss of wealth amounting to Rs 34 lakh crore, driven by a severe selloff in the stock market. This turmoil has resulted in the Sensex shedding over 5,250 points, equivalent to a 6.5% decline, as foreign funds have intensified their selling activities in the domestic market.
Market Plunge and Economic Impact
The conflict has led to crude oil prices exceeding the $100 per barrel mark, reaching a multi-year high. This surge has weakened the Indian rupee to a historic low, with the currency sinking to a record 92.48 against the US dollar. Foreign funds have been withdrawing money from India at an unprecedented pace, not seen in the last 14 months, exacerbating the market downturn.
Friday's Trading Session Details
In Friday's trading session, the Sensex opened on a weak note, down nearly 500 points, and continued to slide throughout the day. It hit an intra-day low of 74,455 points before closing at 74,564 points, marking a decline of 1,471 points or 1.9%. Similarly, the Nifty on the National Stock Exchange followed a comparable trajectory, closing at 23,151 points, down 488 points or 2.1%.
Role of Foreign Investors and Margin Selling
The day's market slide was primarily led by foreign portfolio investors (FPIs), who net sold stocks worth Rs 10,717 crore. This represents the largest single-session net outflow by foreign funds since February 28, 2025, according to ETIG data. Additionally, margin-related selling contributed to the downturn, as speculators faced collateral calls in a falling market, which aggravated the selling pressure.
"There were MTF (margin trade finance)-related selling in Friday's session," said sources familiar with the matter. "In addition, given the volatile geopolitical situation, traders were not willing to carry their positions through the weekend and liquidated that which pushed stock prices further down."
Stock Performance and Key Contributors
At the close of the session, 28 out of the 30 Sensex stocks ended in negative territory. Major contributors to the day's losses included Larsen & Toubro (L&T), HDFC Bank, and State Bank of India (SBI), as per BSE data. The widespread decline underscores the broad-based impact of the geopolitical tensions on India's financial markets.
