Middle East conflict wipes off nearly ₹31 lakh crore from Indian markets as Sensex, Nifty plunge

Escalating hostilities in the Middle East have triggered a sharp sell-off in Indian equity markets, wiping out nearly ₹31 lakh crore in investor wealth since the latest round of conflict involving the United States, Israel and Iran began on February 28.

Benchmark indices extended their losses on Monday amid rising crude oil prices, foreign fund outflows and concerns over the economic fallout for India, which is the world’s third-largest importer of crude oil. During intraday trade, the BSE Sensex dropped 2,299.65 points, or 2.91 per cent, to 76,619.25, while the NSE Nifty 50 fell 714.20 points, or 2.92 per cent, to 23,736.25.

Data from the Bombay Stock Exchange shows that the combined market capitalisation of all listed companies fell from about ₹463 lakh crore on February 28 to roughly ₹432 lakh crore on March 9. Around ₹19 lakh crore was erased between February 28 and March 6, followed by another ₹12 lakh crore decline during Monday’s intraday trade.

The sharp market reaction has been driven largely by a surge in crude oil prices. Brent crude has jumped more than 25 per cent in a week and briefly crossed $114 per barrel amid fears that the conflict could disrupt shipping through the Strait of Hormuz, a critical route for global oil trade.

Foreign portfolio investors have also intensified selling during the global risk-off phase. Over the past four trading sessions, overseas investors have withdrawn nearly ₹21,000 crore from Indian equities, reversing a significant portion of the ₹22,615 crore inflows recorded in February.

The sell-off has been broad-based across sectors, with major banking and infrastructure stocks witnessing sharp declines. Broader markets have also come under pressure, though defence stocks have emerged as a rare bright spot as investors anticipate higher military spending amid the rising geopolitical tensions.