Rs 90,000 Cr Wiped Out in a Day: Are Middle East Tensions Triggering a Bigger Market Correction?

Synopsis: Nifty drops 0.93% to 23,775, Sensex sheds 931 pts to 76,631 as Israel-Lebanon strikes and US-Iran fears disrupt oil. Investors lose ₹90,000 Cr. Will Strait of Hormuz blockade trigger deeper selloff?

Indian stock markets tumbled sharply on Thursday. Renewed fears over the US-Iran war and rising inflation rattled investors across the country. The Nifty 50 opened weak at 23,909 and closed at 23,775 a loss of 222 points, or 0.93%. The BSE Sensex dropped 931 points, closing at 76,631 after opening at 77,319. Meanwhile, the Bank Nifty fell 882 points, finishing at 54,821.

Investors lost over Rs. 90,000 crore in a single session. The total market capitalisation of BSE-listed companies dropped to Rs. 444.61 lakh crore from Rs. 445.51 lakh crore the previous day.

Fresh Israeli attacks on Lebanon on Wednesday shattered ceasefire hopes in the Middle East. Asian markets followed suit. Japan’s Nikkei fell 0.65%, China’s Shanghai index dropped nearly 1%, Hong Kong’s Hang Seng slid 0.50%, and South Korea’s KOSPI fell around 1.50%.

Israel’s latest strikes have directly jeopardised peace prospects. Furthermore, markets are anxious about the Strait of Hormuz a critical oil transit route remaining blocked.

Weak global cues triggered broad selling pressure across Asian markets from early morning. Inflation fears added to the worry, as oil and gas supplies from the Middle East remain severely disrupted.

Industrial demand faces a slowdown too. Qatar, India’s major gas supplier, saw its infrastructure devastated during the US-Iran war. This gas crisis could cut industrial output for the short to medium term.

Strait of Hormuz tensions continue to unsettle traders. Iran’s 10-point ceasefire formula includes full control over the strait a condition that may create fresh geopolitical fault lines.

Additionally, FIIs kept selling aggressively in the cash market. Domestic institutional investors absorbed some of that supply, but overall institutional conviction stayed cautious.

What’s Next for Nifty 50?

Nifty 50 faces a stiff wall at 24,000. Investors have positioned heavily at the 23,800–24,000 range. Until the US-Iran peace talks scheduled from April 10 deliver a concrete result, bulls lack a strong trigger.

Notably, the Bank Nifty holds a key to any recovery. It contributes 35% of the Nifty 50 weight. A decisive close above 56,000 in Bank Nifty could push Nifty 50 toward 25,000. For now, though, markets wait and watch.

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