The US-Israel-Iran war wipes out Rs 11 lakh crore from the Indian stock market. Sensex plummets below 81,000 as investors flock to safe-haven assets.
Massive Wealth Erosion
A massive wave of risk aversion has swept through Indian financial markets, erasing an estimated ₹11 lakh crore in investor wealth. The severe downturn was catalyzed by the escalating military confrontation involving the United States, Israel, and Iran. Following retaliatory actions by Tehran—sparked by the assassination of Ayatollah Ali Khamenei—both the Nifty and Sensex experienced precipitous drops, plunging over 2.5% during consecutive trading sessions.
Geopolitical Triggers
The benchmark indices breached critical psychological support levels during Monday’s bloodbath. The Nifty 50 surrendered more than 300 points to close well below the 25,000 mark, while the Sensex shed over 1,000 points, falling under 81,000 for the first time in several weeks. Consequently, terrified investors are aggressively liquidating equity positions and seeking refuge in traditional safe-haven assets, driving a sharp spike in gold futures.
Analyst Perspectives
Market strategists warn that elevated volatility will persist as long as diplomatic channels remain stalled in the Middle East. The India VIX, a primary gauge of market fear, spiked by 25% to hit 17.13, underscoring the pervasive anxiety. Experts note that while rising crude prices pose a macroeconomic risk, India’s robust domestic consumption and central bank resilience offer a buffer. Additionally, analysts advise caution in the IT sector—which faces headwinds from AI advancements in the US—and suggest closely monitoring banking stocks amid shifting yield curves.
