Friday proved to be a ‘Black Friday’ for the Indian stock market. Rising global geopolitical tensions and a surge in crude oil prices severely rattled investor sentiment on Dalal Street. On the final trading day of the week, the BSE Sensex closed at 76,681.29, registering a massive decline of 982.71 points (1.27%). Meanwhile, the NSE Nifty tumbled 275.10 points (1.14%) to settle at the 23,897.95 level.

Due to this major slump, investors’ wealth eroded by approximately ₹6 lakh crore in a single day. The market witnessed broad-based selling across all sectors, causing the Nifty to breach the crucial psychological level of 24,000. Apart from IT, the Pharma and Media sectors also closed in the red. Although the Metal sector attempted to show some resilience, it too failed to prop up the market. The Midcap and Smallcap indices also recorded a decline of nearly 1%.

Key Reasons for the Decline

Soaring Crude Oil Prices

The primary catalyst for the market downturn was the surge in international crude oil (Brent Crude) prices, which crossed the $107 per barrel mark. Disruptions to oil supplies in the ‘Strait of Hormuz’ and escalating tensions between the US and Iran have further exacerbated the crisis. Since India imports 80% of its oil requirements, rising oil prices have heightened fears of accelerating inflation and a widening Current Account Deficit (CAD).

Heavy Selling in IT Stocks

The IT sector bore the brunt of the sell-off today. The Nifty IT index tumbled by nearly 5%. Major IT heavyweights such as Infosys, TCS, and Tech Mahindra witnessed sharp declines, dampening the overall market sentiment.

Weakness of the Rupee

The Indian Rupee hit a record low of 94.25 against the dollar, heightening concerns among foreign investors (FIIs), who continued to withdraw funds from the market.