Market meltdown: Sensex plumps 1,342 points, investors wipe out ₹3 lakh crore

Mumbai (The Uttam Hindu): Due to the sharp rise in crude oil prices in the international markets due to increasing tension in the Middle East, the key benchmarks of the Indian stock market closed in the red on Wednesday after a day's rise.

The BSE Sensex fell 1.72 percent, or 1,342.27 points, to close at 76,863.71. The NSE Nifty50 fell 1.63 percent, or 394.75 points, to close at 23,866.85.

In the broader market, the Nifty Midcap index declined 1.25 percent, and the Nifty Smallcap index declined 0.36 percent. Sectorally, Nifty Auto emerged as the worst-performing sectoral index, declining over 3 percent. Nifty Financial Services and Nifty Private Bank also performed poorly. In contrast, Nifty Pharma was the biggest gainer among sectoral indices. Meanwhile, the Nifty Oil & Gas and Nifty Healthcare indices also closed with gains.

Investors remained cautious in Wednesday's trading session, due to which both Sensex and Nifty witnessed a decline of more than 1.5 percent. Stocks of banking, financial services and auto sectors contributed significantly to this decline. In intraday trading, Sensex fell by 1,396 points to reach a low of 76,810.14, while Nifty50 fell by about 407 points to 23,854.35. Midcap and smallcap indices also registered a decline of more than 1.5 percent.

This market decline dealt a significant blow to investors' wealth. The total market capitalization of companies listed on the BSE fell from approximately ₹447 lakh crore in the previous session to approximately ₹442 lakh crore. This means investors lost approximately ₹3 lakh crore in a single day. Amidst events related to the US-Iran war, reports emerged that three ships off the Iranian coast were attacked by missile-like projectiles. One of the ships caught fire, forcing the crew to evacuate. This incident further increased uncertainty in global markets.

At one point, Brent crude prices rose by 5.8 percent on the Intercontinental Exchange and reached Rs 92.96 per barrel. Talking about global markets, oil prices again witnessed a rise after reports of attacks on ships amid ongoing military action in the Middle East. Brent crude rose by about 1.8 percent to reach close to $90 per barrel, whereas earlier in the previous session it had fallen by about 11 percent. The British Navy said that three ships were attacked in the Strait of Hormuz and the Persian Gulf on Wednesday, which has increased the fear of disruption on maritime trade routes.

Experts say that fluctuations in oil prices and uncertainty related to the war will continue to affect global financial markets for the time being, as a prolonged conflict could affect global supplies of oil and natural gas.