Indian equity markets came under severe pressure on September 8, as escalating hostilities between the United States and Iran in the Persian Gulf drove crude oil prices higher and exacerbated concerns over the weakening rupee. The benchmark Sensex fell 555 points to close at 75,577, while the broader Nifty declined 144 points to end at 23,635.
The latest decline extends the Sensex’s one-month loss to nearly 3,000 points, or 3.8%, and the Nifty’s drop to 949 points, or 3.9%. Foreign funds continued to offload Indian stocks, adding to the negative sentiment on Dalal Street.
Foreign Investor Selling Accelerates in September
Foreign investor activity had been cautious since mid-August, with net purchases of Rs. 2,953 crore from August 10 through the end of the month, according to combined data from NSDL and BSE. However, the trend reversed sharply in September, with foreign funds net selling stocks worth approximately Rs. 12,700 crore so far this month, further pressuring the market.
Rupee Weakens Amid Risk-Off Mood
The Indian rupee also remained under pressure, falling 34 paise to close at 94.83 per U.S. dollar, despite a record $136 billion inflow through the Reserve Bank of India’s special dollar deposit scheme for NRIs. According to Dilip Parmar of HDFC Securities, the rupee fell in a risk-off environment because of high crude oil prices and aggressive dollar buying.
Market Experts Comment on Rising Tensions
Ankur Punj, Managing Director at Equirus Wealth, noted that renewed hostility between the U.S. and Iran pushed investors toward a low-risk stance on equity assets. “Mirroring weak global cues, domestic markets extended their losing streak Tuesday amid selling in banking, IT, oil and gas, and realty shares. Increasing tension in West Asia triggered a sharp rise in crude oil prices, while depreciation in the local currency against the dollar also dampened the overall market sentiment,” he said.
Investors Lose Rs. 35,000 Crore in a Single Day
The sharp decline in market values resulted in losses of approximately Rs. 35,000 crore for investors on that day. The total market capitalization of BSE stood at Rs. 486.2 lakh crore. Among Sensex stocks, ICICI Bank, HDFC Bank, and Reliance Industries contributed the most to the decline. However, purchases in BEL, Hindustan Unilever, and Adani Ports helped stem further losses.