Sensex, Nifty extend slide; Rs 5.6 lakh crore investor wealth eroded: Why market is falling

Indian equity benchmarks continued to fall sharply in Thursday's trade as a fresh spike in crude oil prices amid renewed escalation in the West Asia conflict weighed on investor sentiment.

At the opening bell, the 30-share BSE Sensex pack tumbled 992.53 points to 75,871.18, while the NSE Nifty50 index dropped 310.55 points to 23,556.30.

The sharp selloff wiped out nearly Rs 5.6 lakh crore from the BSE's total market capitalisation (m-cap) during early trade. Investor wealth, as reflected by the BSE m-cap, declined by Rs 5.63 lakh crore to Rs 436.27 lakh crore, compared with Rs 441.90 lakh crore in the previous session.

Heavyweight stocks such as ICICI Bank Ltd, Mahindra & Mahindra (M&M), Larsen & Toubro (L&T), Eternal, State Bank of India (SBI), Axis Bank, Kotak Mahindra Bank, HDFC Bank, Bajaj Finance, Maruti Suzuki India Ltd (MSIL), Infosys Ltd, Titan and Tata Steel were among the key contributors to the decline, dragging the benchmarks lower.

The broader market also mirrored the weakness, with the Nifty Midcap 100 falling 1.64 per cent and the Nifty Smallcap 100 declining 1.65 per cent.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, "External headwinds have pushed the market into a weak zone. With the war continuing to rage with no signs of let up and Brent crude again bouncing back to $100 levels, the weakness is likely to persist. Even though DIIs are continuously buying in the market, DII buying is not helping the market to recover since FIIs are sustained sellers and show no signs of reversing their strategy in this uncertain global environment."

He added, "For investors, markets can be very frustrating during certain times. This is one such time. The lesson from market history is that attitude and temperament are important in these trying times. Experiences from previous geopolitical conflicts tell us that markets bounce back smartly once the conflicts get over. Therefore, investors should remain invested and continue with systematic investment plans."

Vijayakumar further stated, "Long term investors can use market weakness to slowly accumulate high quality bluechips across sectors. This is also the right time to churn portfolios in favour of high quality stocks."

Brent at $130?

Choice Institutional Equities highlighted the intensifying disruption in global oil supply. "The IEA (International Energy Agency) has released 400 million barrels of crude oil into the market. However, the discharge rate remains capped at 2 million barrels per day (mbd). During the Russian–Ukraine war, the rate of discharge was approximately 1.1mbd. Three vessels in the Strait of Hormuz have been attacked on 11th March 2026. The shipments through the Strait of Hormuz remains close to zero," the brokerage noted.

The brokerage added, "In the current market conditions, as Strait of Hormuz remains closed, for the market to rebalance, roughly 20 million barrels of demand destruction may be required – a level we believe could occur if Brent reaches above $130/b."

FII selloff

Hitesh Tailor, Research Analyst at Choice Equity Broking, highlighted that foreign institutional investors (FIIs) continued their selling trend during the previous session, offloading equities worth Rs 6,267 crore and extending their selling streak to nine consecutive sessions. In contrast, he mentioned that domestic Institutional investors (DIIs) remained consistent buyers for the 11th straight day, purchasing equities worth Rs 4,965 crore.

Meanwhile, Gaurang Shah, Senior Vice-President at Geojit Financial Services, said the geopolitical situation is still evolving and may take time to stabilise. He advised investors to continue their systematic investments from a long-term perspective despite near-term volatility.