The Indian stock market crashed on Thursday, 3 October, with benchmark indices Sensex and Nifty 50 witnessing sharp declines of over 2 per cent each, driven by escalating geopolitical tensions in the Middle East and weak global cues.
The broader markets followed suit, with Nifty Midcap and Nifty Smallcap indices tumbling more than 2 per cent each.
Following today’s decrease, both benchmark indices have dropped by almost 4% from their all-time highs reached on September 27. The Nifty 50 slid 565 points, or 2.2 percent, to reach 25,231.90 on Thursday, while the BSE Sensex fell 1,832.27 points, or 2.2 percent, to a low of 82,434.02.
The indices saw losses for the fourth straight session on this occasion, as the Nifty fell 3.5% for the first time since September 27. October saw a 2% decline in the index, following four months of advances straight since June.
All sectoral indices faced steep losses, with Nifty Auto, Financial Services, Realty, Private Bank, and Oil and Gas being the worst-hit, plunging 2.5 to 4.3 per cent. The Nifty Bank also dipped more than 2 per cent, while FMCG, IT, and PSU Bank indices registered losses exceeding 1.5 per cent.
This market fall was mostly caused by the Middle East’s growing tensions after Iran launched a salvo of missiles at Israel. Iran fired 200 missiles in response for the assassination of Hassan Nasrallah, the leader of Hezbollah, heightening the possibility of a full-scale conflict.
Israel made ground incursions into Lebanon targeting the Hezbollah group after vowing to hold Iran accountable for the strike. According to the Guardian, an Israeli attack on a medical facility in central Beirut resulted in at least six fatalities and seven injuries.
Diverse global cues from Asian markets, where MSCI’s index of Asia-Pacific equities fell by 1%, headed by the 1.6% decline in Hong Kong’s Hang Seng index, increased the pressure.