Street sinks as swift revival hopes fade

Markets fall over 1.6% as renewed uncertainty sparks selling

- Dipti Sharma

On Wednesday, Nifty closed 1.6% lower at 23,866.85 and Sensex ended down 1.7% at 76,863.71.

REUTERS

Indian equity markets started Wednesday on a cautious footing, but the mood quickly turned sour as a broad-based selloff gathered pace. Benchmark indices fell nearly 2%, closing at a 10-month low, quickly erasing the optimism seen in the previous session.

Early hopes that tensions in West Asia might cool soon faded as reports of fresh military activity surfaced and concerns about a protracted closure of Strait of Hormuz returned. The selloff wiped out $5.48 trillion in BSE market capitalization in a single session. Since the West Asia war began, BSE-listed companies have now seen nearly $21.95 trillion of investor wealth evaporate, underscoring the turmoil's toll on the markets.

The Nifty closed 1.63% lower at 23,866.85, and the Sensex ended down 1.72% at 76,863.71. However, losses in the broader market were comparatively lower, with the Nifty Midcap 100 and Nifty Smallcap 250 falling 1.3% and 0.4%, respectively, suggesting bargain hunting. The market's fear gauge India Vix jumped over 11%, reflecting investor anxiety.

"Equity markets tend to reprice swiftly in response, particularly in oil-sensitive sectors such as aviation, paints, cement, and chemicals," said Devarsh Vakil, head of Prime Research, HDFC Securities.