Sen͏sex Falls N͏e͏arly 700 Poin͏ts As͏ US͏-Iran͏ War, $85 Oil͏ and ₹15,͏8͏00 Crore FII Selling ͏Weigh on In͏dian Markets

Mumbai, March 6, 20͏26: Indian benchmark equity indic͏es resumed their downward trend i͏n mi͏d-day trade͏ on F͏riday, with the Sensex cr͏a͏s͏hin͏g nearly 70͏0 points and the͏ Nifty 5͏0 slipping ͏close t͏o͏ 200 p͏oints, a͏s rising geo͏pol͏it͏i͏ca͏l tensi͏ons in West Asia, elevated cru͏de oil pric͏es a͏nd continued foreign capital o͏utflows weigh͏ed on market se͏ntimen͏t͏.

T͏he ͏BS͏E Sens͏ex ͏f͏el͏l to͏ an intraday low of 79,323, declining nearly 700 ͏po͏in͏ts ͏or about 1%, while͏ th͏e ͏Nif͏ty 50 drop͏pe͏d to 24,572, do͏wn n͏early ͏200 points ͏or around͏ 1% during͏ t͏he ses͏s͏ion. ͏T͏he͏ decline came a day after both in͏di͏ces had posted gains͏ ͏of more than 1% eac͏h, wit͏h analysts noting that the ͏prev͏ious session͏’s reb͏ound large͏l͏y ͏re͏flected short-c͏overing following recent market͏ w͏ea͏kness.

The br͏oader ͏imp͏ac͏t w͏as͏ v͏isible in overal͏l valuations as the total marke͏t͏ capitalisation o͏f BSE-͏listed͏ companies declined ͏to ₹452 lakh crore f͏rom ₹4͏53 lakh͏ crore in the͏ pre͏vious sessi͏on, erodi͏ng ͏approxima͏tely ₹1 l͏akh cr͏ore͏ in͏ inv͏estor͏ w͏ealth within a single ͏trading͏ session.

S͏ens͏ex Drops 700 Poin͏ts as Banking He͏avyweights Slide 1͏–3͏%

Selling pressure in major banking and financial stocks significantly weighed on the benchmark indices due to their large index weightage. Shares of ICICI Bank, HDFC Bank, Bajaj Finance, Axis Bank and State Bank of India (SBI) declined between 1% and 3% during the session.

The sectoral indices reflected the broader weakness. The Nifty Bank, Nifty Financial Services, Nifty PSU Bank and Nifty Private Bank indices each dropped more than 1%, dragging the benchmarks lower. Realty stocks also faced pressure, with the Nifty Realty index declining nearly 2%, making it the worst-performing sector of the day.

By 2:00 PM, the Nifty 50 was trading at 24,557.75, down 207.60 points or 0.84%, while the Sensex was at 79,259.27, down 756.63 points or 0.95%, according to market updates.

Seventh Day of US-Iran Conflict Raises Global Risk Concerns

Escalating geopolitical tensions in West Asia emerged as one of the key triggers behind the market decline. The combined military operations by the United States and Israel against Iran entered the seventh day on Friday, increasing concerns about the duration and economic consequences of the conflict.

Reports suggesting that Iran had made conditional offers to the United States initially provided relief to markets earlier in the week. However, subsequent media reports indicating that Tehran had not made such proposals renewed uncertainty around the conflict’s trajectory.

Adding to the uncertainty, US President Donald Trump reportedly stated that there were no time limits for ending the war, reinforcing concerns that the conflict could continue for an extended period.

Brent Crude Near $85 Raises Inflation and Import Bill Concerns

Crude oil prices remained another major factor influencing market direction. Brent crude traded close to $85 per barrel, after touching an intraday high above $86, while US crude closed above $81 per barrel after an 8.5% surge in the previous session.

Higher oil prices are particularly significant for India, which imports more than 90% of its crude oil requirements. Economists estimate that every $1 increase in crude oil prices raises India’s import bill by around ₹16,000 crore, increasing pressure on fiscal balances and inflation.

Global brokerage Morgan Stanley has also downgraded the Indian equity market to “equal weight” in its latest portfolio reshuffle, citing concerns that prolonged conflict in West Asia could disrupt supply chains if oil flows through the Strait of Hormuz remain uncertain.

Meanwhile, US Treasury Secretary Scott Bessent stated on Friday that Washington would provide a 30-day waiver allowing Indian refiners to purchase Russian oil stranded at sea, providing temporary flexibility to energy buyers amid supply uncertainties.

₹15,800 Crore FII Outflows Continue Selling Trend

Foreign institutional investor activity continued to add pressure on domestic equities. In the first three trading sessions of March, foreign institutional investors (FIIs) sold ₹15,800 crore worth of Indian equities in the cash segment.

The sustained selling marks the ninth consecutive month of net FII outflows from Indian equities. Market participants attribute the ongoing withdrawals to global risk aversion, rising crude oil prices and currency volatility linked to geopolitical developments.

Friday’s mid-session market decline reflects a combination of external geopolitical risks, elevated crude oil prices, sustained foreign institutional investor outflows and pressure on banking heavyweights. These factors together contributed to a nearly 700-point fall in the Sensex and a 200-point drop in the Nifty 50, alongside a ₹1 lakh crore decline in total market capitalisation during the trading session.