Indian equity benchmarks witnessed a sharp intraday decline on Monday, with the BSE Sensex crashing 931 points or 1.23% to touch an intraday low of 74,345.92 and the NSE Nifty50 falling 323 points or 1.3% to touch a low of 23,321.60. As of 9:25 AM, the Sensex was down 790 points or 1.04% to trade at 74,450 while the Nifty 50 was 245 points or 1.04% lower at 23,400. The early morning losses have erased ₹6 trillion from the market capitalisation of BSE-listed companies, bringing the all-India market capitalisation down to ₹454 trillion from Friday's ₹460 trillion. According to market reports, ₹3.12 lakh crore was wiped out from the top 10 firms as investor sentiment turned weak amid global uncertainty, rising crude oil prices and inflation fears. The decline has intensified throughout the week, with broader markets also remaining under pressure, indicating sustained risk-off sentiment across all segments.
Brent crude futures climbed 1.3% to $110.70 per barrel on Monday, with US West Texas Intermediate up 1.75% at $107.26 as efforts to end the West Asia war appeared to have stalled after a nuclear power plant in the UAE came under attack. As reported by market sources, a drone strike reportedly caused a fire at a nuclear power facility in the United Arab Emirates, while Saudi Arabia said it had intercepted multiple drones over the weekend. The sharp rise in crude prices above the $110-per-barrel mark is emerging as a key concern for Indian markets, given India's dependence on oil imports as the world's third-largest crude importer. V K Vijayakumar, chief investment strategist at Geojit Investments, noted that 'Brent crude has spiked to $111 on absence of initiatives to open the Strait of Hormuz', with elevated crude potentially forcing another round of price hikes in petrol and diesel, which will have negative implications for inflation. The India VIX, the volatility gauge, spiked 6% to 19.92, reflecting heightened nervousness among investors.
The Indian equity markets have witnessed a broad valuation recalibration in 2026, with the Nifty 50 declining 11.60% and the Nifty 500 shedding 6.68% on a year-to-date basis as of May 13. According to data from Ace Equity, smaller and mid-sized fintech players like MOS Utility and Pine Labs have plunged around 70% and 47.6% respectively, while Mobikwik and AvenuesAI significantly underperformed with declines of over 18% each. However, larger platforms like PB Fintech and One97 Communications (Paytm) have closely tracked or slightly underperformed the Nifty 50, displaying far better resilience than sub-scale players. PB Fintech displayed relative resilience, slipping 11.57% in line with the Nifty50, while Paytm declined 15.78%, showing the market's preference for established players over smaller fintech companies.
The Indian rupee fell to an all-time low of 96.18 per dollar, down 0.2% on the day and eclipsing its previous all-time low of 96.1350, making it Asia's worst performing currency so far in 2026, declining 5.5% since the West Asia war on February 28. Foreign investors continued to pare their exposure to Indian equities, withdrawing ₹27,048 crore so far this month, with total outflows by Foreign Portfolio Investors (FPIs) from the equity market reaching ₹2.2 lakh crore in 2026, higher than the ₹1.66 lakh crore pulled out during the entire 2025. According to data with the NSDL, FPI outflows were net sellers in all months of 2026, except February, when they invested ₹22,615 crore, the highest monthly inflow in 17 months. In March, they pulled out a record ₹1.17 lakh crore, followed by ₹60,847 crore in April. Over six uninterrupted quarters, foreign ownership in PB Fintech dropped from 49.70% to 39.94%, while Paytm saw a decline from 55.53% to 49.40%, highlighting the impact of sustained FII selling pressure.
Investor mood remained fragile after fresh warnings from US President Donald Trump intensified concerns over the ongoing US-Iran standoff. As reported by market sources, Trump said in a post on Truth Social that the time was 'ticking fast' for Iran and warned that if Tehran failed to act soon, 'nothing will be left'. The sharp rhetoric has reignited fears of a prolonged conflict in the region, keeping global markets under pressure. Reports indicate that US President Donald Trump is expected to discuss military options on Iran, with Trump writing: 'the clock is ticking' for Iran and warning there 'won't be anything left' if action was not taken soon, adding that 'Time is of the essence!'. The spike in US 10-year bond yield to 4.62% is another negative factor for EM equity markets, with the rupee may further depreciate aggravating the vicious cycle of rupee depreciation and FPI selling.
