Stock market crash today: It was a bloodbath on Dalal Street on Wednesday morning, as the Indian stock market suffered sharp losses in morning trade on March 4, as investors continued to dump risk assets amid the ongoing US-Iran war, which shows no signs of easing.
The conflict in West Asia has pushed crude oil prices significantly higher, stoking fresh inflation concerns and dealing a strong blow to expectations of near-term rate cuts by the US Federal Reserve and the Reserve Bank of India.
Sensex crashed over 1,750 points, or 2.2%, to drop to an intraday low of 78,480.63, while the Nifty 50 plunged over 500 points, or 2.1%, to the day’s low of 24,334.85.
Investors got poorer by ₹9 lakh crore within minutes as the overall market capitalisation of BS-listed firms was ₹448 lakh crore around 9:20 am on Wednesday, compared to ₹457 lakh crore in the previous session.
Why is the stock market falling? Key factors explained
Let’s take a look at five key factors behind the market selloff:
1. US-Iran war: No signs of easing
The tensions between have been escalating since the killing of Iranian Supreme Leader Ayatollah Ali Khamenei, and the exchange of a barrage of missiles continues in West Asia. Israel on Tuesday claimed it launched fresh attacks in Tehran and Beirut. US President Donald Trump on Monday said the war could end in the next four to five weeks, but that he was prepared “to go far longer than that.”
“With the war escalating and crude oil rising, markets are going into a period of heightened uncertainty. Nobody knows how long this conflict will go on and what will be the extent of the havoc it could wreak,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, noted.
2. Rupee plunges to record low
The Indian rupee slumped 66 paise to an all-time low of 92.15 against the US dollar in early trade on Wednesday, as the US dollar index jumped to a multi-month high amid rising inflation risks from the US-Iran war.
A weaker rupee can accelerate foreign capital outflows from the Indian stock market, as it signals pressure on corporate profitability from higher input costs.
According to Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, technically, the rupee may remain volatile within the 91.00–92.00 range in the near term, with crude price action and geopolitical developments being the key drivers.
3. Crude oil at a multi-month high
Brent Crude is trading above $82 per barrel, while WTI Crude has surged above $75 per barrel, as escalating US-Iran tensions have disrupted shipments.
(This is a developing story. Please check back for fresh updates.)
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