Holi Turns Red for Markets: Iran War Dampens Dalal Street, Sensex Crashes 1,700 Points

New Delhi: There was a huge fall in the Indian stock market around Holi. There was a sharp fall in both Sensex and Nifty, which dealt a big blow to investors. Selling pressure was visible on many big stocks in the market, including big ones like Larsen & Toubro, Reliance and Indigo.

How deep was the market decline?

Sensex fell by about 1600 points during trading. Nifty also fell by almost two percent and slipped below 24,400. Due to continuously falling indices, a huge amount of investors' capital was lost in a matter of hours. An attempt at slight recovery was visible for some time during the day, but the selling pressure was so high that the market could not survive.

Shares of which companies fell the most?

Many big stocks played an important role in the market decline. There was a sharp decline in the shares of infrastructure giant Larsen & Toubro. Shares of aviation sector company Indigo also remained under pressure. Apart from this, there was weakness in shares of many other big companies including Tata Steel. Selling in shares of midcap and smallcap companies also increased, pushing the broader market indices further down.

What are the reasons believed to be behind the decline?

According to analysts, the international situation is a major reason behind this decline. Rising geopolitical tensions in the Middle East have created uncertainty in global markets. Rising tensions between the US, Israel and Iran have affected investor sentiment. Along with this, the rise in crude oil prices has also increased the pressure on the market. An increase in oil prices increases the possibility of inflation and impact on economic balance.

What is the impact of the activities of foreign investors?

Market experts say that selling by foreign investors has also weakened the market movement. Foreign institutional investors often pull money out of emerging markets when global risk appetite increases. Recent trading sessions also witnessed selling by foreign investors, which further added to the market weakness.

What strategy should investors adopt?

Experts believe that such a decline is a natural part of the market and long-term investors need not panic. One should avoid making hasty decisions. They say that for investors who have a long-term perspective, even periods of market decline can prove to be opportunities.

What will decide the future direction of the market?

Market movements in the coming days will largely depend on global signals. Crude oil prices, international political developments and activities of foreign investors will play an important role in determining the direction of the market. At present, investors seem cautious and are keeping an eye on the next trend of the market.