Stock Market Crash: Sensex, Nifty Hit 1-Year Low; How US-Israel-Iran War Wiped Out Rs 4,753,333 Crore

The Indian stock market is bleeding, and there seems to be no escape from bears. 2026 has turned into one of the biggest shocks for the equity market as Sensex and Nifty have nosedived by 14% to 15% year-to-date. The gears of intense selling pressure escalated, though, in March after US-Israel launched coordinated attacks on Iran. The Islamic Regime retorted after losing half of its leadership, including Ali Khamenei. Since then, the US-Israel-Iran war has entered its fourth week, and the pain continues for the stock market.

Because, currently, Sensex and Nifty are trading at around a 1-year low. Since US and Israel's airstrikes on February 28, Indian stocks have witnessed a cumulative market rout of over Rs 47.53 lakh crore in 23 days so far.

Sensex, Nifty Crash On March 23:

Sensex and Nifty are facing Black Monday. At the time of writing, Sensex dropped by 1882.48 points or 2.53% to trade at 72,643.97. This is near its intraday low of 72,653.52.

Meanwhile, the Nifty 50 plunged 551.60 points or 2.4%, to trade at 22,562.90. The benchmark is also near its intraday low of 22,582.30.

Majority of stocks are in deep red. Adani Ports, Tata Steel, Bajaj Finance, Titan, Bharat Electronics, SBI, Trent, Indigo, HDFC Bank, L&T, Ultratech Cement, and M&M are the biggest draggers, with a 3% to 5% decline. Notably, heavyweight Reliance Industries has plunged nearly 1%. The only stocks in green are TCS, HCL Tech and Tech Mahindra.

Bank Nifty has crashed by 541.50 points or 2.34%. BSE BANKEX is in free fall and lost 1,814.09 points or 3.01%. All indices are facing a downfall. Nifty Midcap and Smallcap indexes tumbled by around 3% each. Meanwhile, Nifty Auto, Nifty FMCG, Nifty Metal, Nifty PSU Bank, Nifty Realty, Nifty Consumer Durables, and Nifty Financial Services have plummeted by 3% to 4%. Other indices have also dropped by 1-2%. Only IT index is marginally down.

Following the bloodbath, India's volatility index has skyrocketed by nearly 15%.

"The weakness reflects a significant deterioration in global risk sentiment, as geopolitical tensions in the Middle East continue to escalate," said Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.

Global Market On Hotbed:

Sensex and Nifty crashed, following the trend in the global market. Asian markets have dropped significantly with Japan's Nikkei nosediving by 5% and South Korea's KOSPI plunging over 6%.

The analyst explained that the escalation in rhetoric between the United States and Iran, particularly around the strategic Strait of Hormuz, has heightened fears of potential supply disruptions in global energy markets. Any threat to this critical oil transit route has immediate implications for inflation and global growth expectations.

Meanwhile, crude oil prices remain on the positive front. US WTI trades around $100 per barrel and Brent Crude is near $115 per barrel. The expert said, brent ontinues to trade at elevated levels near $110 per barrel, marking a sharp surge since the onset of the conflict.

"For an import-dependent economy like India, sustained high oil prices translate directly into inflationary pressures, currency weakness and margin compression across sectors," said Hariprasad.

Are DIIs Buying Not Enough Compared To FIIs' Selloffs?

If that is not enough, the stubborn selloffs from foreign institutional investors (FIIs) are jarring in the face despite strong buying from domestic institutional investors (DIIs).

Year-to-date, DIIs have invested Rs 2,08,812.45 crore in Indian equities, with more than Rs 1.11 lakh crore infusion alone in March so far. Despite the strong inflow from DIIs, Indian market is failing to see fresh pickup.

FIIs have sold up to Rs 1,34,856.89 crore in Indian stocks so far in 2026. Their biggest selling came in March 2026 alone to the tune of Rs 86,780.89 crore as of now.

Sensex, Nifty At 1-Year Low:

The last time Sensex hit around the 72,800 mark was on March 3, 2025. Similarly, Nifty 50's 22,500 mark was last seen on April 8, 2025.

Accordingly, Sensex is over a 1-year low and Nifty is trading near its 52-week low.

US-Israel-Iran Impacts Sensex, Nifty Extremely:

At the time of writing, BSE-listed companies' market capitalization stood at Rs 4,15,97,339.50 crore. This is a decline of Rs 4,753,331.77 crore from the market capitalization of RS 4,63,50,671.27 crore by the end of February 2026.

Stock Market Outlook Ahead:

According to Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, with the war in West Asia getting into the fourth week, there is no clarity on when the war will end. Unfortunately, the war is escalating with President Trump giving ultimatum to Iran to open the Strait of Hormuz in 48 hours. Iranian president's response that " the Strait of Hormuz is open to all except those who violate our soil" has prevented panic in the oil market. However, the uncertainty is huge and markets will be waiting and watching the outcome.

"It is important to understand that the huge risk-off globally has impacted all assets including stocks, bonds and precious metals like gold and silver. In fact, the crash in the safe haven gold is worse than in equities," he said.

Nifty Target Cut:

Normula has recently its 1-year target for Nifty to 24,900 from its earlier target of 29,300 for 2026. Further, CITI has also lowered its target to 27,000 from 28,500.

Furthermore, Anand James, Chief Market Strategist, Geojit Investments believes that the widening of the lower bollinger band, following wild moves last week, forces us to bring 22000 back into the picture. The first leg of this down move would aim for 22560, before any consolidation emerges.

Sensex Target Cut:

Earlier, Sensex was expected to hit 1,00,000 mark in 2026 by many global brokers like Morgan Stanley. However, this scenario seems now a far fetched reality.

"On the technical front, the index is showing signs of consolidation near lower levels, indicating a cautious undertone with scope for range-bound movement. The 73,900-74,000 band acts as an immediate demand zone where dip-buying interest may emerge on any pullback, while the 75,000-75,200 range stands as the immediate resistance hurdle, where upside is likely to face supply pressure and profit booking," Hitesh Tailor, Technical Research Analyst at Choice Equity Broking said in his near-term outlook.

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