Mumbai — Indian stock markets extended their decline on Monday, with the benchmark BSE Sensex plunging over 1,700 points or approximately 2.3% by 10:30 am, while the Nifty fell by 560 points or 2.4%. The heavy sell-off pushed investors towards a potential loss of more than Rs 11 lakh crore, according to The Economic Times.
Since the onset of the West Asian conflict on March 2, the markets have been in a downward spiral. Concerns over escalating energy prices and geopolitical tensions have caused widespread investor unease. Over the past three weeks, foreign investors have withdrawn approximately $9.5 billion from Indian equities, Reuters reported. The India VIX, a volatility index, surged by 15.3% on Monday, reflecting heightened market jitters.
Global and Regional Market Declines
Major Asian stock indices also registered significant losses. As of 10:30 am Indian time, Hong Kong’s Hang Seng index was down 3.2%, South Korea’s Kospi fell 5.8%, Japan’s Nikkei declined 3.5%, and China’s Shanghai Composite decreased by 2.3%.
Rupee Plummets to Record Low
The Indian rupee touched an all-time low of 93.9 against the US dollar on Monday amid ongoing foreign fund outflows and declining stock markets. Since Friday’s close, the rupee has depreciated by 41 paise. Reuters reported that other major Asian currencies also weakened between 0.1% and 0.8%, as the conflict enters its fourth week with no signs of easing supply disruptions.
South Korea’s won also hit a 17-year low against the dollar, trading at 1,510 won per USD, AFP reported, amid increased market volatility.
Rising Global Energy Prices
International oil prices have surged over 50% since the conflict erupted. Brent crude traded near $113 per barrel on Monday, up from $78 per barrel on February 27, just before the conflict escalated. Iran’s effective blockade of the Strait of Hormuz—a vital maritime route for approximately 20% of global petroleum supply—has exacerbated concerns over energy security.
US benchmark WTI crude approached $100 per barrel, further fueling fears of a global energy crisis. France 24 reported that the International Energy Agency (IEA) chief Fatih Birol warned that the world risks facing its worst energy crisis in decades, citing a loss of 11 million barrels of oil daily—more than the combined losses during the oil shocks of the 1970s.
Birol indicated that the IEA is in talks with governments across Asia and Europe to release additional stockpiled oil if necessary, Reuters added.