War robbing D-Street: M-cap drops further Rs 9.4 lakh crore

Mumbai: India's main stock indices crashed over 2% on Monday as overseas investors continued their stampede for the exit amid mounting tensions in West Asia, sticky crude prices and a fresh drop in the rupee to record lows, intensifying risk-off sentiment.

The BSE Sensex fell 1,635.67 points, or 2.2%, to close at 71,947.55, while the Nifty 50 declined 488.20 points, or 2.1%, to settle at 22,331.40. The sell-off wiped out ₹9.41 lakh crore in market capitalisation on Monday. In the entire FY26, Sensex has plunged 5.36% and Nifty 3.60%.

"Availability, as well as price of energy, due to ongoing Middle East war is adversely impacting India's GDP growth, inflation and current account deficit," said Nilesh Shah, managing director, Kotak Mahindra AMC. "There is FPI (foreign portfolio investor) selling across in rupee and equity market, resulting in downward movement across all markets."


Overseas investors sold shares worth a net ₹11,163 crore on Monday, taking their total tally for March to ₹1.22 lakh crore, the highest monthly outflow ever.

Domestic institutions were net buyers on Monday, purchasing equities worth ₹14,894 crore.

Since the war began on February 28, both indices have dropped nearly 11.5% - marking the worst monthly fall since March 2020, onset of the Covid-19 wave.

Oil Surge More Than 1990's
Bank stocks fell sharply on Monday after the Reserve Bank of India capped banks' forex positions, a move that could force a large unwinding of trades and trigger mark-to-market losses, weighing on near-term earnings.

The Bank Nifty fell 3.8% to 50,275.35, its lowest close since April 9, 2025.

Wall Street opened higher on Monday amid guarded optimism after US President Donald Trump said Washington was in talks with a "more reasonable regime" to end the war in Iran but warned Tehran of attacks on its oil wells and power plants if it did not open the Strait of Hormuz. Separately, US secretary of state Marco Rubio was cited as saying in a TV interview that Trump prefers diplomacy as a way to end the war.

Brent crude was up 2% at $114.89 after the fresh threats, taking its monthly surge to 60%. The oil spike in March surpasses the surge after Iraq's invasion of Kuwait in 1990.

"The recent surge in crude oil prices has introduced a layer of macroeconomic uncertainty for India," said Uttam Kumar Srimal, senior research analyst, Axis Securities. "A sustained crude oil above $100 per barrel could pose significant challenges."

Market breadth remained weak, with 835 shares advancing, 3,618 declining and 140 remaining unchanged out of 4,593 shares traded.