Nearly ₹9.7 lakh crore of investor wealth was wiped out from Indian markets in just two trading sessions as the rupee crashed past the 92-per-dollar mark for the first time, shaken by soaring oil prices and a fast-escalating US-Israel conflict with Iran.
Indian equities slumped sharply on Wednesday while the rupee tumbled to a record low, as global investors rushed to safe-haven assets amid fears that the Middle East war could disrupt crude supplies and stoke inflation in one of the world’s fastest-growing economies.
The rupee weakened by 55 paise to 92.03 against the US dollar, breaching the psychologically crucial 92 level for the first time. This fall surpassed its previous record lows of 91.99 and 92.02 touched in late January 2026.
Simultaneously, Dalal Street witnessed a steep sell-off. The total market capitalisation of the dropped from ₹456.17 lakh crore on Monday to ₹446.47 lakh crore, eroding roughly ₹9.7 lakh crore in investor wealth.
The benchmark plunged 1,710 points to 78,529 — its lowest level since April last year — while the sank nearly 477 points to 24,389, slipping below 24,400 for the first time in almost seven months.
Market sentiment deteriorated after the United States and Israel carried out military strikes on Iran over the weekend, prompting retaliatory attacks across the oil-rich region. US President warned that negotiations with Iran were unlikely to halt further escalation, cautioning that the conflict could last “four to five weeks.”
The geopolitical flare-up rattled global energy markets. surged to around $82.53 a barrel — its highest since January 2025 — while climbed to about $75.37. Prices spiked after tanker movement through the Strait of Hormuz slowed following repeated vessel attacks.
For India, which imports nearly 85% of its crude requirements, the surge in oil prices poses a serious risk to inflation and the trade deficit. VK Vijayakumar, Chief Investment Strategist at , said the real concern is inflation and its potential impact on growth. He cautioned that a prolonged conflict could further weaken the rupee, widen the trade gap and dent corporate earnings.
Foreign institutional investors intensified the pressure. According to data from the , FIIs offloaded equities worth ₹3,295.64 crore in the previous session, while domestic institutional investors purchased shares worth ₹8,593.87 crore.
The sell-off was broad-based. Shares of Larsen & Toubro, IndiGo, Adani Ports, Mahindra & Mahindra and Bajaj Finance declined between 3% and 6%. However, Bharat Electronics Limited, Infosys and HCL Tech managed modest early gains.
Despite the volatility, Vijayakumar advised investors against panic selling. “Markets have an uncanny ability to climb walls of worry,” he said, recommending that long-term investors with a higher risk appetite gradually accumulate quality stocks during corrections.
The turbulence extended beyond India. South Korea’s Kospi index slumped more than 12%, underscoring the widening global shockwaves from the escalating Middle East conflict.