Markets also faced the blow of foreign fund exodus from domestic equities.
Since the West Asia conflict started on February 28, the BSE benchmark has crashed 9,339.64 points or 11.48 per cent.
Tracking the sharp fall in equities, the market capitalisation of BSE-listed companies fell by Rs 51,09,498.82 crore to Rs 4,12,41,172.45 crore (USD 4.36 trillion) this month.
“The current bearish trend is largely externally driven rather than fundamentally broken. Elevated crude oil prices, geopolitical risks in the Middle East, and sustained FII selling have created a risk-off environment,” Ponmudi R, CEO – Enrich Money, said.
From its all-time high of 86,159.02, the BSE benchmark index is down 14,211.47 points or 16.49 per cent.
Brent crude, the global oil benchmark, surged 4.15 per cent to USD 117.46 per barrel.Foreign investors have withdrawn over Rs 1 lakh crore from domestic equities in March, making it the worst monthly outflow, weighed down by escalating tensions in West Asia and a weakening rupee.
Pabitro Mukherjee, Associate Vice President – Technical Research, Bajaj Broking, said, “The four-week period after the onset of the conflict has witnessed the most intense wave of risk aversion since the global market turmoil triggered by the COVID-19 pandemic in 2020. During this phase, FIIs have been the dominant force behind market weakness, driving sustained selling pressure.”
Foreign Institutional Investors (FIIs) executed an unprecedented sell-off in Indian equities during March 2026, marking one of the largest monthly capital outflows in recent history, he added.
“The primary catalyst for this large-scale withdrawal has been escalating geopolitical tensions in West Asia, which have heightened global uncertainty and risk aversion,” Mukherjee said.
Equity benchmark indices Sensex and Nifty ended the last trading session of the 2025-26 fiscal year over 2 per cent lower on Monday.
“Escalating tensions in West Asia continued to weigh heavily on markets, as the ongoing US-Israel conflict with Iran entered its fifth week and expanded across the region,” Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said.
