Markets reel as rupee crashes past 92 for first time amid West Asia conflict

Indian financial markets were rocked by global turmoil after the rupee breached the 92-per-dollar mark for the first time, while nearly Rs 9.7 lakh crore in investor wealth was erased in just two trading sessions. The sharp decline followed a spike in crude oil prices and escalating military action involving the United States, Israel and Iran, triggering widespread risk aversion across global markets.

The rupee fell 55 paise to close at 92.03 against the US dollar, surpassing its previous record lows of 91.99 and 92.02 recorded in late January 2026. Equity markets mirrored the panic. The BSE’s total market capitalisation dropped from Rs 456.17 lakh crore on Monday to Rs 446.47 lakh crore, wiping out roughly Rs 9.7 lakh crore. The Sensex tumbled 1,710 points to 78,529, its lowest since April last year, while the Nifty 50 slid 477 points to 24,389, falling below the 24,400 level for the first time in nearly seven months.

The sell-off intensified after the United States and Israel launched military strikes against Iran over the weekend, prompting retaliatory action across the oil-rich region. US President Donald Trump warned that negotiations were unlikely to halt further escalation and said the conflict could last “four to five weeks.” Brent crude rose to around $82.53 per barrel, its highest level since January 2025, while US West Texas Intermediate climbed to $75.37. Disruptions to tanker movement through the Strait of Hormuz further heightened supply concerns. For India, which imports about 85% of its crude oil needs, the surge in energy prices has revived fears of inflation and a widening trade deficit.