At 10:08 am, the Sensex slumped over 1,500 points to the day’s low of 71,579, while the Nifty declined nearly 500 points, slipping below the 22,250 level and almost wiping out all gains made during the previous day. The sharp selloff today has wiped off more than Rs 11 lakh crore from the total market capitalisation of all companies listed on BSE, dragging it down to nearly Rs 411 lakh crore.
Sun Pharma, IndiGo, Asian Paints, Adani Ports, Zomato-parent Eternal and L&T were among the top losers on Sensex, declining 3-5%. HCL Tech shares were the only gainers on the index, trading with only marginal gains. This came as India Vix, which measures volatility in the markets, jumped 5% to 26.27.
All sectoral indices on NSE traded in the red, with Nifty PSU Bank and Nifty Private Bank declining more than 3% each to emerge as the top losers. Around 2,259 stocks declined on the stock exchange, while 280 advanced and 49 remained unchanged.
Oil rose more than 5%, while gold and Asian stocks fell after Trump’s speech. Asian markets traded lower, with India leading the decline, followed by Japan’s Nikkei.
In the MCX market, silver futures due May 2026 fell Rs 13,613 or 5.5% to Rs 2,29,888 per kg. While, Gold reversed course to fall over 1%, snapping a four-day winning streak, with spot gold down 1.3% at $4,694.48 an ounce and U.S. gold futures dropping 1.9% to $4,723.70.
Why are markets falling today? Here are the key factors
1) Trump says US will hit Iran ‘extremely hard’
US President Donald Trump’s address to the nation retriggered worries about heightened conflict in the Middle East in the near-term. Trump said that US forces will ‘finish the job’ in Iran soon as “core strategic objectives are nearing completion”, and hit the country “extremely hard” within weeks. “We’re now totally independent of the Middle East, and yet we are there to help,” he said. “We don’t have to be there. We don’t need their oil. We don’t need anything they have. But we are there to help our allies,” he added.
He reiterated his claim that Iran’s “navy is gone, their air force is in ruins” and Tehran’s leaders are all dead. He claimed that joint strikes had “obliterated” the Islamic Republic’s nuclear program, and “if we see them make a move, even a move for it, we will hit them with missiles very hard again”. The US President claimed that Iran’s ability to launch missiles and drones have been curtailed.
2) Crude oil prices jump back above $106/barrel
Brent crude futures surged nearly 5% to trade at $105 per barrel. WTI Crude meanwhile gained more than 3% to $103.3 per barrel in the early morning hours of Thursday. Oil prices crossed the crucial $100 mark in March after the closure of the Strait of Hormuz, marking the first time since Russia’s invasion of Ukraine in 2022. Front-month Brent futures hit a record monthly gain of 64% in March, Reuters cited LSEG data dating back to June 1988.
Trump’s comments suggesting that the US might attempt to wrap up the war within the next two-three weeks may have spurred investor worries about heightened attacks on Iranian power and crude facilities, unless some deal is achieved, said Garima Kapoor Deputy Head of Research and Economist at Elara Capital.
3) Bond yield soars
Bond yields have sharply surged after Trump’s comments. The benchmark 10-year yield, which rises when Treasury prices fall, jumped to 4.37%. US two-year yields, which reflect interest rate expectations, were up more than 4 bps at 3.85%. This comes after the bond yields in March recorded their biggest gains in more than three months.
4) FIIs extend selling streak
Indian stock markets have seen relentless selling by foreign investors, which has weighed down on rupee and market sentiment. FIIs remained net sellers of Indian equities for the 22nd consecutive session, selling shares worth nearly Rs 8,331 crore on Wednesday, according to data on NSE. While this does not reflect today’s activity, sustained outflows in recent sessions have weighed on investor sentiment.
5) Global markets tumble
Global markets tumbled after Trump’s comments, with Dalal Street being no exception. Japan’s Nikkei declined more than 2% while South Korea’s Kospi fell over 4%. China’s Taiwan Weighted and Hong Kong’s Hang Seng declined more than 1% each.
Wall Street had ended the previous session in the green, but the future contracts of the indices indicate that the markets may open lower today. Dow Jones futures are currently down around 1%.
Currency watch
Despite the broader weakness in the market, the rise in rupee may provide some hope for investors. The Indian currency rose sharply in the early trading hours as RBI’s latest measures to curb rupee speculation left traders anticipating a glut of onshore dollar sales spurred by the unwinding of positions.
Rupee rose to 93.53 against the US dollar, marking a rise of 1.4% from Monday’s closing level. RBI on Wednesday stepped up its efforts to support the currency by barring banks from offering rupee non-deliverable forwards to resident and non-resident clients and preventing companies from rebooking cancelled forward contracts.
What lies ahead?
“The focus of the US has moved away from regime change and opening of Hormuz. We believe, as US Iran escalation ends, the cost of insuring vessels passing through Hormuz would come down too, allowing gradual movement of energy to resume in Hormuz.,” Garima Kapoor from Elara Capital said.
Uncertainty will prevail in the near term with crude oil prices remaining firm, even as hopes have been offered for closure or war within the next 2 to 3 weeks, the analyst said, adding that Iran doesn’t seem to be buckling under any pressure from America so far. “We see a finality to war soon. Heightened Volatility is likely to persist in the short term,” she further said.
“With President Trump’s declaration ‘we are going to hit Iran extremely hard in the next two to three weeks’, market sentiments have again turned negative,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments
Trump’s statement that the US will “finish the job in two to three weeks” cannot be taken at face value since the President has been notoriously inconsistent in all his views, Vijayakumar further said, adding that Trump can change his position anytime.