Sensex crashes over 1,400 pts from day’s high, Nifty below 23,150. 5 triggers behind Rs 9L cr wipeout

The Indian stock market sharply reversed its morning gains to close deep in the red, as surging bond yields, rising oil prices and a wave of global uncertainty rattled investor sentiment.

The Sensex plunged nearly 1,430 points from its day's high of 75,436, while the Nifty 50 tumbled below the 23,150 level.

At the close, Sensex settled 778 points lower at 74,003, while, Nify dropped 279 points to 23,118. The reversal marks a nearly 2% intraday drop for the benchmark indices.


The sharp plunge wiped out more than Rs 9 lakh crore from the total market capitalisation of BSE-listed companies, dragging it down to Rs 472 lakh crore.

Bharat Electronics (BEL) shares crashed more than 6% to lead losses on Sensex. IndiGo, Titan, Bajaj Finserv, Adani Ports, M&M, SBI, Trent, Asian Paints, Bajaj Finance, Eternal, UltraTech Cement, Axis Bank, Kotak Mahindra Bank and Power Grid shares fell 2-4% to follow. Bucking the trend, HCLTech, Infosys, TechM and TCS shares rallied up to 4% as the global AI selloff boosted sentiment of Indian IT stocks, while heavyweight HDFC Bank shares gained over 1% as CEO succession race speeds up.

Broader markets crashed deeper into the red, with Nifty Smallcap 100 and Nifty Midcap 100 plunging over 2% each. Among the sectors, Nifty Realty crashed over 4% to lead losses, while Nifty Auto, Nifty Metal, Nifty PSU Bank, Nifty Consumer Durables and others dropped 2-3% each. The overall market breadth turned sharply negative, with NSE seeing 2,824 declines against 754 advances, while 109 stocks remained unchanged.

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Here are 5 key factors behind today' Dalal Street rout:

1) Soaring bond yields

The benchmark 10-year US Treasury yields have crossed the crucial 5% mark for the first time since 2023. The sharp surge in bond yields came as traders are increasingly expecting the Federal Reserve to keep interest rates higher ⁠for longer, after soaring oil prices revived fears of renewed inflationary pressures.

Rising bond yields typically make the debt market more attractive to investors, which often leads to some downturn in the equity market.

2) Fed rate hike expectations

The Federal Reserve is all set to announce the outcome of their FOMC meeting on Wednesday. The American central bank will likely raise its interest rate this week, and deliver at least one more hike by the end of March, according to a majority of economists polled by Reuters. This comes as price pressures have already been running well above the American central bank's 2% annual target.

The Fed rate hike expectations intensified after inflation data released on Friday showed that US consumer price inflation excluding energy and food, a key measure of underlying inflation, rose 0.3% last month from the previous month.

Read More: Infosys, HCLTech, TCS, other IT stocks soar up to 6%; Nifty IT rallies 5% as global AI slowdown calls boost sentiment

3) Iran-US conflict

Iran-backed Houthi forces in Yemen launched dozens of missiles and drones at a military airbase in Saudi Arabia on Monday, while Gulf Arab states postponed planned discussions with Iran. An Iranian cargo vessel was struck on Sunday in the Strait of Hormuz, Iranian state media said. Iran then postponed a plan to brief its neighbouring countries on its efforts to manage shipping in the strait. There was no immediate response from the US military, which has struck Iranian-flagged vessels during its blockade of Iranian ports and faces a new threat from Iranian ballistic missiles launched at its warships.

Iran's government meanwhile continues to remain defiant. "Our people can't be bullied into submission. Iran won't surrender," President Masoud Pezeshkian said in a social media post. US President Donald Trump disagreed, saying that Iran "wants to make a deal so bad" that "they are calling constantly."

4) Oil prices rise above $108/barrel

Amid the escalating tensions in the oil-rich Middle East, Brent crude futures jumped more than 2% to cross $108 per barrel. WTI Crude futures meanwhile neared $104 per barrel. The worries remain high as Iran’s attacks on Saudi Arabia’s East-West pipeline risk further supply disruptions.

"The recent attack may be more severe and could threaten the remaining 2mb/d of recent Yanbu exports, with the latest repair assessments ranging from 'very soon' to eight weeks," Reuters quoted Goldman Sachs as saying in its note.

5) IPO boom

While a number of headwinds fight the bulls of Dalal Street, the sharp surge in investor interest in India’s primary market is further adding to the downturn. India’s primary market is heading into one of its busiest weeks of 2026, with 11 IPOs opening for subscription and looking to raise a combined Rs 24,574 crore. The week will be led by two large mainboard issues of NSE and Hero Motors, which together account for more than Rs 23,500 crore of the total fundraising.

“The booming Indian IPO market is the centre of attraction of investors now. The heavy over subscription and attractive listing gains have drawn millions of investors into the IPO market. This has sucked off big money from the secondary market,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

What lies ahead for Dalal Street?

Global equity markets were already expected to be under pressure from the US 10-year yield hitting the psychological 5% mark, Vijayakumar said. He noted that the macro scenario will continue to be under pressure from the rising crude price. “This is a scenario which the Fed cannot ignore in the FOMC meeting tomorrow. Even though President Trump doesn’t want a rate hike, his appointee Kevin Warsh is most likely to hike rate by 25 bp because it would be difficult to justify a hold in rates in the present macro scenario,” he said.

In the middle of this, a positive for the Indian market is that there is clarity emerging on the choice of HDFC Bank MD and CEO. A quick acceptance of the name of the successor by the RBI can influence the benchmark index significantly, he added.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)