The Indian equity market declined sharply on Thursday, 19 March, with benchmark indices falling over 2% amid escalating geopolitical tensions in the Middle East and rising crude oil prices. Investor wealth eroded by approximately ₹7 lakh crore during the session.
The market opened lower after three consecutive trading sessions of gains, as reports indicated that the United States and Israel targeted Iran’s South Pars gas field and nearby infrastructure. The development increased uncertainty across global markets and weighed on domestic equities.
Selling pressure intensified at the opening bell, with broad-based declines across indices. The 30-share BSE Sensex opened more than 1,500 points lower at 74,750.92 and extended losses in early trade. At 9:42 am, the Sensex was trading at 75,017.08, down 1,687.05 points or 2.20%. The NSE Nifty-50 also declined more than 2%, opening at 23,180.95 and trading at 23,270.75 at 9:44 am, down 507.05 points or 2.13%.
Global equity markets also reflected weakness. In Asia, Japan’s Nikkei 225 declined approximately 2.74%, while South Korea’s Kospi traded 2.50% lower, tracking losses on Wall Street.
In the United States, the S&P 500 fell 1.36%, the Dow Jones Industrial Average declined 1.63%, and the Nasdaq Composite closed 1.46% lower. Market participants are now focused on the Bank of Japan’s upcoming interest rate decision for further directional cues.
The US Federal Reserve maintained interest rates in the range of 3.5% to 3.75% following its two-day meeting. Federal Reserve Chair Jerome Powell stated that the conflict involving Iran has increased uncertainty around the inflation outlook. He indicated that determining the future path of interest rates would be challenging, contributing to market uncertainty.
Crude oil prices rose sharply amid concerns over potential supply disruptions linked to the conflict between Israel and Iran. Brent crude prices crossed $112 per barrel, with the May futures contract trading 1.24% higher at $112.6 per barrel.
The rise in oil prices has implications for import-dependent economies such as India, with potential effects on inflation and corporate costs, which may continue to exert pressure on markets.
Activity in the primary market remained ongoing. Thursday marked the final day for subscription to the GSP Crop Science IPO, which was subscribed 1.64 times by the second day. The company aims to raise approximately ₹400 crore through the issue, with a tentative listing date of 24 March.
The Novus Loyalty IPO also remained open for subscription. The issue received 0.88 times subscription on the first day. It is a ₹60.15 crore book-built issue, with subscriptions continuing into the second day. Ongoing activity in the IPO market indicates continued investor participation despite the broader market decline.
