The BSE Sensex crashed over 800 points on Tuesday, continuing its downward streak as global crude oil prices remained elevated. According to The Times of India, the decline erased over ₹5 lakh crore in investor wealth, dragging the total market capitalisation of BSE-listed companies down to nearly ₹462 lakh crore. The market crash was triggered by multiple factors including geopolitical tensions, currency weakness, and persistent foreign investor selling.
A key trigger behind the market decline was renewed uncertainty surrounding the US-Iran conflict. As reported by The Times of India, US President Donald Trump said the ceasefire with Iran was 'on life support' after Tehran rejected Washington's latest proposal aimed at ending the conflict. Trump described Iran's demands as 'garbage' and said Iran's response had cast serious doubt over the future of the ceasefire that came into effect on April 7. Iran has reportedly sought a halt to hostilities across all fronts, including Lebanon, and demanded recognition of its sovereignty over the Strait of Hormuz.
Crude prices stayed elevated as hopes of a quick resolution to the Middle East conflict weakened, raising fears that the closure of the Strait of Hormuz could continue for longer. According to The Times of India, Brent crude advanced about 1% to trade above $105 per barrel on Tuesday morning, while US benchmark WTI crude also climbed nearly 1% to around $99 per barrel. The 33-kilometre-wide passage, linking the Persian Gulf to the Gulf of Oman, is a critical route that carries more than one-fifth of the world's daily oil and gas supplies.
The Indian rupee slipped to an all-time low on Tuesday, as concerns over the fragile ceasefire and rising crude prices intensified worries about the impact on India's economy. As reported by The Times of India, the domestic currency weakened to 95.55 against the US dollar, down 0.2% from its previous close, surpassing the earlier record low of 95.4325 touched last week. The currency weakness added pressure on equity markets given India's heavy reliance on imported energy.
According to Vikram Kasat, Head Advisory at PL Capital, as reported by The Times of India, investor sentiment remained cautious due to continued foreign institutional investor selling, a weakening rupee and uncertainty surrounding global macroeconomic conditions. However, he noted that strong domestic liquidity and improving market breadth were helping cushion the downside to some extent. The market direction in coming sessions would largely depend on the movement in crude oil prices, global risk appetite and institutional flows, while earnings-driven stock-specific action is expected to continue.
