“Indian Stock Market Plunges Amid Escalating Middle East Conflict: Nifty Falls 400 Points, Oil Prices Surge
DNN 
On October 3, 2024, the Indian stock market experienced a significant crash due to escalating geopolitical tensions in the Middle East. The Nifty fell over 550 points, while the Sensex plunged more than 1,800 points. This sharp decline wiped out approximately ₹7 lakh crore in market capitalization. The crisis was triggered by missile strikes between Iran and Israel, which led to fears of disruptions in global oil supply and a surge in crude oil prices.
Foreign Institutional Investors (FIIs) have also been selling heavily, moving funds from India to other markets like China due to better valuations there. Rising oil prices, compounded by profit booking and concerns about high valuations, added to the market’s downward pressure. Sectors like Nifty Realty and Nifty Auto were particularly hit, with declines of 4% and 3% respectively.
Market analysts have advised caution, as further escalations could cause even more volatility, particularly in oil-importing nations like India.
The stock market crash was driven by escalating tensions between Iran and Israel. The conflict intensified when Iran launched missile strikes on Israel, leading to retaliatory threats from Israel. This raised concerns about potential disruptions in global oil supply, causing oil prices to surge by more than 6% in two days.
This geopolitical tension added pressure to an already fragile market. Foreign Institutional Investors (FIIs) have been selling heavily in Indian markets, redirecting their capital to Chinese stocks, which offer better valuations. In fact, FIIs sold ₹5,579 crore worth of shares in a single day, contributing to the overall negative sentiment.
Additionally, concerns over profit booking ahead of Indian state elections, high valuations, and regulatory changes from SEBI aimed at curbing speculation in the derivatives market further compounded the market’s fall. All sectoral indices traded in the red, with Nifty Realty and Nifty Auto suffering the most.
If tensions in the Middle East continue to rise, particularly involving oil infrastructure, the global market could see more volatility, impacting oil-importing countries like India severely.
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