Indian Equity Indices Plummet to Worst Monthly Losses in Six Years Amid West Asia Conflict

Benchmark equity indices recorded their worst monthly losses in six years as the West Asia conflict rattled investor sentiment globally. Since the war began on February 28, the Sensex and Nifty have declined 9.48% and 9.37%, respectively, marking their steepest monthly fall since March 2020, when indices had plunged over 23% during the Covid-19 crisis. One trading session remains before the month concludes. Markets resumed trading on a weak note after a holiday on account of Ram Navami, with both the Sensex and Nifty falling sharply on Friday. The Sensex dropped 1,690.23 points, or 2.25%, while the Nifty declined 486.85 points, or 2.09%, as Brent crude prices surged past $110 per barrel amid uncertainty over ceasefire prospects. In the preceding two sessions, markets had witnessed a recovery, with the Sensex rising 2,577.06 points, or 3.54%, and the Nifty gaining 793.80 points, or 3.54%, after US President Donald Trump announced a five-day pause in the war against Iran. On Monday, both indices had fallen 2.46% and 2.60%, respectively. On a weekly basis, the Sensex lost 949.74 points, or 1.27%, to close at 73,583.22, while the Nifty fell 294.90 points, or 1.28%, to end at 22,819.60, marking the fifth consecutive week of losses. Over these five weeks, the Sensex and Nifty have declined 11.15% and 10.76%, respectively. Broader BSE Midcap and BSE Smallcap fell by 1.27% and 1.76% respectively during the week. Investor wealth worth Rs 41.35 lakh crore was wiped out during the month, including losses of Rs 8.86 lakh crore on Friday alone. “Indian equities ended lower after a volatile session as rising bond yields, negative cues from Western markets, and mixed Asian trends kept investors on edge,” said Vinod Nair, Head of Research at Geojit Investments. Profit booking set in after the recent two-session rally, as the rupee fell to a record low amid sustained FII selling, while escalating tensions in the Middle East heightened caution ahead of the weekend, he added. The India VIX Index surged 17.49% during the week to close at 26.8, reflecting heightened nervousness and uncertainty. On Friday alone, it rose 8.77%. So far in March, foreign portfolio investors (FPIs) have been net sellers to the tune of $12.2 billion (Rs 1.13 lakh crore), marking record monthly outflows, while domestic institutional investors (DIIs) have recorded all-time high monthly net buying of Rs 1.28 lakh crore. During the week, FPIs sold shares worth $2.6 billion (Rs 24,447 crore), while DIIs bought shares worth Rs 26,897 crore. PSU banks, realty, energy, capital goods, and metals were the top sectoral laggards during the week, declining by up to 3.98%. BEL, Reliance Industries, Trent, SBI, and HDFC Bank were among the top Sensex losers for the week, falling by up to 5%. On Friday, shares of Reliance Industries slumped 4.55%—their biggest single-day fall since June 4, 2024—to Rs 1,348.25 on the BSE after the government imposed a tax on exports of diesel and jet fuel. The stock was the top loser among the 30 Sensex constituents and contributed 367.65 points, or 21.75%, to the Sensex’s 1,690.23-point decline. L&T, HCL Tech, Bajaj Finance, Infosys, and UltraTech Cement emerged as the top Sensex gainers during the week, rising by up to 3.82%.