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Indian stock market crashes as Trump’s Iran warning sparks global selloff
Sensex Plunges 20 days low 1,878 Points, Nifty Slips Below 24,000
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Richa Singh - Wed, 08, Jul 2026
- 15:16 EDT
- 37
Representative Image / Canva
Indian equities suffered one of their steepest declines in recent months on Wednesday after renewed geopolitical tensions between the United States and Iran rattled global financial markets.
The benchmark BSE Sensex closed 1,878.26 points, or 2.40 percent, lower at 76,302.46, while the Nifty 50 slipped below the key 24,000 mark, reflecting widespread risk aversion among investors.
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The selloff followed comments from US President Donald Trump, who declared that the ceasefire agreement with Iran was over, reigniting fears of a broader conflict in the Middle East. As reports of overnight military strikes fueled uncertainty, investors rushed to exit equities and move toward safer assets.
The impact was visible across global markets, with India's stock market among the worst affected. During intraday trading, the Sensex plunged nearly 1,900 points, while the Nifty lost more than 490 points, erasing gains built over recent sessions.
The sharp correction also wiped out significant investor wealth. The total market capitalization of companies listed on the BSE fell from approximately $5.61 trillion (converted from ₹480.20 lakh crore) on Tuesday to about $5.51 trillion (converted from ₹471.64 lakh crore), implying a one-day erosion of nearly $100 billion (converted from ₹8.56 lakh crore).
The market weakness coincided with a sharp spike in crude oil prices. Brent crude jumped about 6 percent overnight to nearly $78 a barrel, reflecting concerns that renewed hostilities could disrupt oil supplies from the Middle East.
Investor attention is now firmly focused on the Strait of Hormuz, one of the world's most critical energy chokepoints. Any disruption to shipping through the narrow waterway could significantly impact global oil supplies, pushing fuel prices higher and adding fresh inflationary pressure on major importing nations, including India.
Higher crude prices pose a particular challenge for India's economy because the country imports the majority of its oil requirements. Rising energy costs can increase transportation expenses, fuel inflation, widen the trade deficit, and put pressure on corporate earnings—factors that often weigh heavily on equity markets.
While geopolitical developments remain fluid, analysts say market volatility is likely to persist until there is greater clarity on the US-Iran situation. For investors, the latest selloff serves as another reminder that global geopolitical shocks can quickly spill over into financial markets, especially when they threaten the stability of energy supplies.
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