Indian equity benchmarks Nifty 50 and Sensex crashed more than 3% on Thursday, their steepest single-day decline since June 2024, closing at 23,002.15 and 74,207.24 respectively. Escalating West Asia conflicts drove crude above $110 a barrel, stoking inflation fears, while HDFC Bank shares tumbled over 5% following chairman Atanu Chakraborty's resignation.
India's NSE Nifty 50 fell 775.65 points or 3.3% to 23,002.15, below 23,000, while the BSE Sensex dropped 3.3% to 74,207.24, erasing three-day gains and marking the lowest levels since February 16, 2024. The plunge, the biggest single-day loss in nearly two years, was fueled by intensified West Asia war escalation: strikes hit Iran's South Pars gas field—the world's largest—boosting natural gas prices 5%, with Iran retaliating against energy sites in Qatar, Saudi Arabia, Kuwait, and UAE. Crude surged to $112 a barrel, disrupting Strait of Hormuz shipping talks. India, reliant on West Asian crude and Qatari gas, faces potential shortages and higher inflation. HDFC Bank shares plunged up to 9% intraday and closed over 5% lower after chairman Atanu Chakraborty resigned, citing 'certain practices' conflicting with his values; the bank clarified no regulatory issues, but US ADRs fell 7%. All Nifty 50 stocks except ONGC declined, with heavyweights like L&T, Reliance, ICICI Bank down up to 5%. All sectoral indices fell, led by automobiles, banking, financials, and IT. Broader markets slumped, with small-caps hit hardest—over half trading below three-year average valuations, technicals showing faster oversold entry and price exhaustion across timeframes. India VIX surged nearly 22%, and 81% of NSE stocks declined. The rupee hit a record low past 93 per dollar on Thursday (Goldman Sachs sees potential 95 in 12 months if conflict persists), though March-end strengthening tradition via RBI interventions could aid corporates; traders eye Friday close around 91.75-92.50 amid oil surge challenges. FIIs sold over $8 billion in March, the highest since January 2025. The US Fed held rates steady with a hawkish tone; Chair Jerome Powell noted higher energy prices would push inflation, revising 2026 forecast to 2.7%. On Friday, gold edged up slightly but headed for a third weekly drop amid strong dollar and Fed stance; oil stayed elevated post-attacks, though Asian stocks opened higher tracking US rebound and retreating oil prices as US/Israeli leaders sought to ease Iran war fears. Investors watch for de-escalation to stabilize energy markets.
