The Indian stock market extended its decline for the third consecutive session on Thursday, weighed down by escalating geopolitical tensions in key global regions. The benchmark indices closed sharply lower, eroding investor wealth significantly over the past three trading days.
A Steep Three-Day Decline for Indian Equities
The selling pressure remained intense on Dalal Street. The BSE Sensex dropped 900.91 points, or 1.41%, to settle at 63,148.15. Meanwhile, the NSE Nifty 50 fell 264.90 points, or 1.39%, to close at 18,857.25. This marked a continuation of the bearish trend, with the Sensex losing a substantial 2.5% over just three trading sessions.
The market breadth was overwhelmingly negative, reflecting widespread pessimism. On the BSE, a staggering 2,835 stocks declined compared to only 839 that advanced. The total market capitalization of BSE-listed firms plummeted, shedding approximately ₹3.5 lakh crore in a single day. The cumulative loss over the three-day period was even more severe, standing at nearly ₹9 lakh crore.
Geopolitical Triggers: US-Venezuela and Saudi Arabia in Focus
The primary drivers behind this sustained sell-off are external geopolitical developments that have heightened risk aversion among global investors. Analysts point to two major flashpoints.
First, renewed tensions between the United States and Venezuela have rattled markets. Reports suggest the US government is preparing to reimpose oil sanctions on Venezuela. This move threatens to disrupt global crude oil supplies, injecting volatility into energy markets and, by extension, impacting import-dependent economies like India.
Second, concerns are mounting around Saudi Arabia. The world's largest oil exporter is navigating a complex geopolitical landscape, and any instability or policy shift there has immediate repercussions for global oil prices and financial market sentiment.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, confirmed the link, stating, "The market is falling due to rising geopolitical tensions." He specifically highlighted the situations involving Venezuela and Saudi Arabia as critical factors spooking investors.
Sectoral Damage and Investor Sentiment
The sell-off was broad-based, affecting almost all major sectors. Banking and financial stocks, often considered the backbone of the Indian market, were among the hardest hit. The Nifty Bank index underperformed the main indices. Oil & Gas and Metal stocks also witnessed significant pressure due to their sensitivity to global commodity prices and trade flows.
The fear gauge, India VIX, surged by 8.45% to reach 12.40, indicating a sharp rise in expected market volatility over the near term. This spike underscores the nervousness and uncertainty prevailing among traders and institutional investors.
Foreign Institutional Investors (FIIs) have been net sellers in recent sessions, adding to the downward pressure. Their risk-off approach in emerging markets, triggered by global events, is directly impacting liquidity and price trends in Indian equities.
Outlook: Caution Prevails Amid Global Uncertainty
The immediate outlook for the Indian stock market remains cautious. The trajectory is heavily dependent on the evolution of the mentioned geopolitical situations. Any further escalation is likely to trigger more selling, while a de-escalation could provide relief.
Domestic factors, including the ongoing quarterly earnings season and macroeconomic data, have taken a backseat for now. Market experts advise investors to adopt a defensive stance, focus on quality stocks with strong fundamentals, and avoid aggressive bets until global volatility subsides. The market is expected to remain highly reactive to international news headlines in the coming days.
