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Stock market crash: A massive sell-off engulfed the Indian stock market on Thursday (March 19), causing the benchmark indices—the Sensex and the Nifty 50—to snap their three-day streak of impressive gains.

The Sensex plunged 2,497 points, or 3.26%, to close at 74,207, while the Nifty 50 plunged 776 points, or 3.26%, to end at 23,002.

The BSE 150 Midcap index crashed 3%, while the BSE 250 Smallcap index fell 2.6%.

Investors' wealth was eroded by about ₹12 lakh crore as the overall market capitalisation of BSE-listed firms dropped to ₹427 lakh crore from ₹439 lakh crore in the previous session.

Let's take a look at the key factors behind the stock market crash today:

Contrary to expectations of an imminent end, the US-Iran war, which began on February 28, has been intensifying, dealing a blow to global market sentiment.

According to media reports, after a strike on one of Iran’s major gas facilities, Iranian President Masoud Pezeshkian warned of “uncontrollable consequences” that “could engulf the entire world”.

Both sides are now targeting energy facilities, driving up crude oil and gas prices.

Brent crude jumped more than 10% to hit $118 per barrel, further aggravating concerns of a global inflation flare-up that could lead to tighter monetary policy, weaker consumption, and lower corporate profitability.

Crude oil prices have jumped again amid concerns of a major supply shock following fresh attacks on key energy infrastructure in the Middle East.

"The uncertainty surrounding the war has turned worse with Israel hitting the world’s largest LNG refinery in Iran. If Brent remains above $110 for an extended period of time, that will have negative implications for India’s macros. India’s GDP growth and corporate earnings in FY27, too, will be impacted," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

To some extent, the HDFC Bank episode is also contributing to market pessimism. The bank's chairman, Atanu Chakraborty, has resigned with immediate effect, citing “certain happenings and practices within the bank” that were “not in congruence” with his personal values and ethics.

HDFC Bank share price crashed more than 8% to hit its 52-week low of ₹772 on the BSE on Thursday and was the biggest index drag today. Finally, the stock closed 5.05% down at ₹800.35.

The US Federal Reserve kept the benchmark interest rates steady on March 18, signalling that the Middle East war has created a challenging environment, and its impact on the US economy remains uncertain.

The Fed also slightly revised the inflation forecast upward and indicated that there may be one rate cut of 25 basis points in 2026, dashing the market expectations of at least two cuts this year.

Some experts believe the US Fed may not cut rates this year due to increased inflationary risks.

"It is likely that the Fed will be on an extended pause until there is more clarity around the effects of the Iran crisis and fading tariff inflation," said Madhavi Arora, Chief Economist for Emkay Global Financial Services.

The Indian rupee is at a record low level against the US dollar. On Wednesday, the domestic currency dropped 26 paise to 92.6375, according to Bloomberg.

The currency derivatives market is closed on Thursday due to Gudi Padwa.

Rupee's weakness hit market sentiment significantly, as it can further aggravate foreign capital outflows, which have already been intense, by reducing the returns of foreign investors. Moreover, it also raises inflationary pressure, which can lead to higher interest rates.

Apart from these factors, massive foreign capital outflows, lingering concerns about the impact of crude oil prices on the domestic economy, and weak global cues are also adding to the market selloff.

Major Asian and European markets crashed by 1-3% after Wall Street indices fell by over 1% overnight.

Foreign institutional investors (FIIs) have been aggressively selling Indian equities in the cash segment amid currency weakness and concerns over a delayed earnings recovery, as rising crude oil prices stoke inflationary pressures.

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stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.Nishant is a market reporter at Mint, where he holds the official designation of Principal Correspondent – Markets. He has been closely tracking the I...

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