From Gap-Up Start to Sharp Fall, Dalal Street Witnesses Intense Bearish Momentum Through the Day

₹7.5 Lakh Crore Wiped Out: Dalal Street Crashes 1,236 Points as US–Iran Fears Trigger Broad Selloff

Index	Price	Change	% Chg
Nifty 50	25,454.35	365.00	-1.41%
Nifty Bank	60,739.55	811.25	-1.32%
Nifty Financial	28,069.50	393.75	-1.38%
BSE SENSEX	82,498.14	1236.11	-1.48%

Indian equities witnessed a sharp risk-off move on Thursday, with benchmark indices logging their biggest single-day fall in over two weeks. The BSE Sensex plunged 1,236 points to close at 82,498 after sliding more than 1,400 points intraday, while the Nifty 50 ended 1.41% lower at 25,454 — decisively breaching the 25,500 mark.

The damage was not merely optical. The selloff erased ₹7.55 lakh crore in investor wealth, dragging total BSE market capitalisation down to roughly ₹464 lakh crore. More importantly, the decline snapped a three-day recovery streak and came with heavy volume expansion, signalling distribution rather than mild profit booking.

The spike in the India VIX — up over 10% to 13.46 — underscored rising nervousness among traders and pointed to the possibility of wider intraday swings ahead.

This wasn’t a stock-specific correction. It was a macro-driven reset.

The India VIX, which measures expected volatility, surged over 10 percent to settle at 13.46, signaling heightened nervousness and the possibility of wider price swings ahead.

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Five Key Triggers Behind Today’s ₹7.55 Lakh Crore Selloff

1️⃣ Escalating US-Iran Geopolitical Tensions

The primary catalyst behind the crash was rising military tension between the US and Iran, raising fears of potential disruption in oil supply routes through the Strait of Hormuz. Investors rushed to de-risk portfolios amid concerns of a prolonged conflict in a key oil-producing region. Such geopolitical uncertainty often leads to capital flight from emerging markets like India.

2️⃣ Surge in Crude Oil Prices

Brent crude climbed to around $71 per barrel after jumping more than 4 percent in the previous session. For India, which imports the majority of its oil, higher crude prices amplify inflation risks, widen the current account deficit, and increase fiscal pressure. Rising fuel costs also weigh on corporate margins across sectors such as aviation, auto and FMCG.

3️⃣ US Federal Reserve Rate Cut Uncertainty

Markets remain uncertain about the Federal Reserve’s interest rate trajectory. Persistent inflation concerns in the US have reduced expectations of near-term rate cuts, leading to risk-off sentiment globally. Higher-for-longer rates typically dampen emerging market flows.

4️⃣ Rising Global Bond Yields

Elevated bond yields reduce the relative attractiveness of equities, especially in volatile environments. Investors often rotate toward safer fixed-income assets during periods of geopolitical uncertainty.

5️⃣ Profit Booking After Three-Day Rally

Prior to Thursday’s crash, the Sensex and Nifty had gained nearly 1.4 percent over three consecutive sessions, supported by December-quarter earnings. Thursday’s session saw heavy profit booking once early gains faded.

Aakash Shah of Choice Broking noted:

“Participation remains stock specific, indicating cautious deployment of capital. While earnings are improving, consolidation may persist in the near term.”

Sectoral Action: Oil Gains, Everything Else Bleeds

Amid the carnage, oil-linked stocks were rare bright spots. ONGC and Oil India gained between 3–5% as crude surged. Defensive pockets like select pharma names also showed relative resilience.

However, frontline laggards such as InterGlobe Aviation, UltraTech Cement, M&M, Bharat Electronics, and Trent declined sharply. Realty and media sectors bore the brunt, falling over 2% each.

Midcaps and smallcaps were not spared. The Nifty Midcap index fell 1.6% while Smallcaps declined 1.3%, both breaching short-term moving averages — reinforcing the risk-off tone.

Top Losing Sectors

Top Gainers

Top Losers

Technical Breakdown Signals Growing Weakness in the Nifty

From a technical perspective, Thursday’s sharp decline has significantly altered the short-term structure of the Nifty. The index not only formed a large bearish candle on the daily chart but also decisively slipped below its 20-day, 50-day and 100-day exponential moving averages — a development that strengthens near-term bearish momentum.

Market experts now believe that the immediate support zone lies in the 25,350–25,300 band. If the index fails to hold above this region on a closing basis, the correction could deepen toward the 25,150 level and potentially test the crucial psychological support of 25,000 in the short term.

On the upside, any recovery attempt is likely to face stiff resistance in the 25,550–25,600 zone. However, the broader trend reversal would require a sustained move above the 26,000 mark, which analysts continue to see as a key hurdle for restoring bullish confidence.

Hitesh Tailor, Research Analyst at Choice Equity Broking, said:

“Fresh long positions should ideally be considered only after a sustained breakout above the 26,000 level, which would signal a more reliable improvement in overall market sentiment.”

Bank Nifty Engulfs Previous Gains as Bears Regain Control

The Bank Nifty index came under heavy selling pressure during Thursday’s session, correcting 1.32 percent to close at 60,739.55. The sharp decline effectively erased the gains accumulated over the previous two trading sessions and marked a decisive shift in short-term momentum. Technically, the index formed a large bearish candle on the daily chart, engulfing prior bullish formations — a pattern that typically signals growing downside pressure.

The correction is particularly significant because Bank Nifty had been outperforming the broader market in recent sessions. However, Thursday’s selloff indicates that bulls have temporarily lost control, especially as the index slipped below immediate intraday support zones.

FII Selling Intensifies Pressure on IT Stocks

Foreign Institutional Investors dumped ₹10,956 crore worth of IT stocks in early February. Their holdings fell to ₹4.49 lakh crore — the lowest level in four years. Since January 2025, cumulative IT selling has reached nearly ₹74,698 crore, with total holdings down 38 percent from peak levels.

Concerns around generative AI impacting traditional IT services revenue streams have intensified sector-specific selling.

Daily Market Action

Out of Nifty 500 stocks, 432 closed lower, confirming broad market weakness.

Here’s What Happened Today and Why Traders Reacted

Markets initially opened steady but quickly turned negative as geopolitical tensions escalated. Rising crude prices and a spike in volatility triggered stop-losses. F&O expiry amplified swings, while weak global cues added to panic selling.

The India VIX jump above 13 indicated rising fear and hedging activity.

What Impact on Investors and Market Outlook?

The ₹7.55 lakh crore wealth erosion underscores how vulnerable markets remain to global shocks. Banking, auto and FMCG-heavy portfolios saw significant drawdowns.

If Nifty sustains below 25,300, further downside toward 25,000 may unfold. A recovery requires reclaiming 26,000 decisively.

In the near term, volatility is expected to remain elevated amid geopolitical uncertainty, crude price movements and FII flows. Investors are advised to focus on fundamentally strong stocks and maintain disciplined risk management strategies.

Bottom Line

Thursday’s ₹7.5 lakh crore wipeout was not a random selloff. It was a convergence of geopolitical risk, oil inflation fears, bond yield pressure, technical breakdowns, and profit booking after a fragile rally.

The broader trend has not collapsed — but short-term momentum has clearly turned cautious.

Markets are now in a macro-sensitive phase. The next directional cue will likely come from oil stability, US rate signals, and whether buyers step in near key support levels.

Until then, volatility is back — and complacency is off the table.

• Nifty 50
• Bank Nifty
• Sensex

FAQs Dalal Street Witnesses Intense Bearish Momentum Through the Day

1️⃣ How does a sudden spike in India VIX above 13 impact short-term Nifty and Bank Nifty trading strategies?

A spike in India VIX above the 13–14 zone typically signals rising fear and wider expected price swings. For traders, this often means:

• Increased intraday volatility

• Higher option premiums

• Greater probability of sharp reversals

In such conditions, aggressive leveraged trades become riskier, and position sizing discipline becomes crucial.

2️⃣ If Nifty breaks below its 20-day, 50-day and 100-day EMAs simultaneously, does it signal a trend reversal or just short-term panic?

When Nifty breaches multiple key moving averages in a single session, it indicates a shift in short-term momentum. However, whether it becomes a structural reversal depends on follow-through selling. If the index sustains below those averages for multiple sessions, it strengthens bearish structure; otherwise, it could be a volatility-driven shakeout.

3️⃣ Why do rising crude oil prices hurt Indian equity markets more than global markets?

India is a major net importer of crude oil. A surge in oil prices:

• Worsens the current account deficit

• Pressures the rupee

• Raises inflation expectations

• Impacts corporate margins

This creates broader macroeconomic pressure compared to oil-exporting economies.

4️⃣ How does geopolitical tension between the US and Iran translate into immediate stock market corrections in India?

Geopolitical conflicts increase uncertainty in global energy supply chains and financial markets. Investors respond by:

• Reducing exposure to emerging markets

• Moving capital into safe-haven assets

• Increasing hedging positions

This leads to capital outflows and equity corrections, especially in risk-sensitive sectors.

5️⃣ Why is FII selling in IT stocks significant for broader market stability?

IT stocks carry substantial weight in benchmark indices. Large FII selling:

• Impacts index momentum

• Signals reduced global risk appetite

• Reflects concerns over sector fundamentals

Sustained FII outflows often cap market recoveries.

6️⃣ What does a “bearish engulfing candle” in Bank Nifty indicate for the next few sessions?

A bearish engulfing pattern suggests that sellers have overwhelmed buyers. If accompanied by high volumes and a VIX spike, it often leads to:

• Continued short-term weakness

• Lower highs formation

• Increased volatility

Confirmation typically comes if the index fails to reclaim immediate resistance.

7️⃣ Is it advisable to deploy fresh capital during a ₹7 lakh crore market selloff or wait for confirmation signals?

Deploying capital during sharp corrections can be rewarding, but timing matters. Investors should:

• Avoid lump-sum deployment at support breaks

• Prefer staggered buying

• Focus on fundamentally strong stocks

• Wait for stabilisation signals like VIX cooling and index reclaiming key resistance levels