Middle East Crisis Hits Indian Investors Hard: Rs 14 Lakh Crore Loss in Two Days
The Indian equity market experienced a significant downturn, closing deep in the red due to escalating conflicts in the Middle East. Investors have collectively lost over Rs 14 lakh crore in just two trading sessions, with the total market capitalization of listed companies on the Bombay Stock Exchange (BSE) dropping from Rs 475 lakh crore to Rs 461 lakh crore.
On Friday, the Sensex fell 808 points (0.98%) to close at 81,688, while the Nifty dropped 235 points (0.93%) to settle at 25,014. Major losers included M&M, Bajaj Finance, Nestle, Asian Paints, and Reliance. Conversely, top gainers were Infosys, Tech Mahindra, and Tata Motors.
Midcap and smallcap stocks also faced selling pressure, with the Nifty Midcap index down 550 points (0.93%) at 58,747 and the Nifty Smallcap 100 index down 193 points (1.02%) at 18,758. Among sectoral indices, auto, financial services, and FMCG were the hardest hit, while only IT and PSU banks managed to close in the green.
The India VIX, a measure of market volatility, rose by 7.21% to close at 14.12. Market experts attribute the bearish sentiment to investor concerns over the Middle East conflict and a general “sell-on-recovery” strategy. While crude prices have surged, OPEC plus’s increase in production may mitigate further rises.
Foreign institutional investors (FIIs) sold equities worth Rs 15,243 crore on October 3, while domestic institutional investors bought equities worth Rs 12,914 crore on the same day. Experts predict that pessimism may persist amid rising crude prices and a shift of fund flows to cheaper markets like China.
